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Answer the question and show all working 3. (a) What are the assumptions of the Monetary Model of exchange rate determination? (b) In monetary model,

Answer the question and show all working

3. (a) What are the assumptions of the Monetary Model of exchange rate determination? (b) In monetary model, under free floating exchange rate, what will be the impact of an increase of money supply on the exchange rate and national income? Show graphically and explain it.

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