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Answer the following questions 1. Why does the monetary approach imply that higher expected inflation causes a currency to depreciate? 2. What does the monetary

Answer the following questions

1. Why does the monetary approach imply that higher expected inflation causes a currency to depreciate?

2. What does the monetary theory of exchange rates imply for:

a. Relatively rapid growth in a country's money supply?

b. Relatively rapid growth in a country's national income?

c. An increase in a country's interest rates versus interest rates in another country?

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