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course money and banking Question 2 a) Describe the FOUR factors that affects the exchange rate in long run. (20 marks) b) Apply the effect

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Question 2 a) Describe the FOUR factors that affects the exchange rate in long run. (20 marks) b) Apply the effect of raise in interest rate on the equilibrium exchange rate and how does it affect the domestic currency value. (10 marks) c) Demonstrate the answer (b) in graph by showing the changes between interest rate and domestic currency value. (10 marks) Total: 40 Marks

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