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Consider two small open economies, A and B, with similar macroeconomic conditions. If A substantially increases its money supply growth and B does not, briefly
Consider two small open economies, A and B, with similar macroeconomic conditions. If A substantially increases its money supply growth and B does not, briefly explain what would you expect to happen (using classical models) to
a) inflation in A vs. B
b) nominal interest rates in A vs. B
c) real interest rates in A vs. B
d) nominal exchange rates in A vs. B
e) real exchange rates in A vs. B
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