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Combine a graph showing the interest parity condition and one showing money demand and supply to demonstrate simultaneous equilibrium in the money market and the

Combine a graph showing the interest parity condition and one showing money

demand and supply to demonstrate simultaneous equilibrium in the money market

and the foreign exchange market. How would an increase in the U.S. money supply

affect the Dollar/Euro exchange rate and the U.S. interest rate? Illustrate your

answer graphically with explanations.

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