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following argument regarding foreign exchange (FX) rate by T (true) or F (false). Here, FX means home currency/foreign currency. For example, 1,350 Korean won per
following argument regarding foreign exchange (FX) rate by T (true) or F (false). Here, FX means home currency/foreign currency. For example, 1,350 Korean won per one US Dollar. (1) Monetarists claim that GDP rise in home country causes demand for money increase and eventually causes FX rate fall. (2) Monetarists claim that home country's interest rate rise causes demand for money decrease and eventually causes FX rate rise. (3) Keynesians claim that home country's GDP rise causes imports increase and eventually FX rate fall. (4) Keynesians claim that home country's interest rate increase cause capital inflow and eventually FX rate fall. (5) Both monetarists and Keynesians agree that home country's quantity of money increase causes FX rate rise
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