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Compare the short and long-run effcts on the depreciation rate of the domestic currency for the following independent shocks. Expectations are adaptive. (10) a. Domestic
Compare the short and long-run effcts on the depreciation rate of the domestic currency for the following independent shocks. Expectations are adaptive.
(10) a. Domestic commercial banks have a one-time rise in voluntary reserves (the amount of reserves they want to hold).
(10) b. The foreign central bank decides to engineer a long-term depreciation of its own currency.
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