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Holding the supply of dollar-denominated assets constant, what is the impact of the following changes on the dollar exchange rate, defined as the amount of
Holding the supply of dollar-denominated assets constant, what is the impact of the following changes on the dollar exchange rate, defined as the amount of other currencies a dollar can buy, with respect to other currencies?
a) A rise in nominal domestic interest rates (5 points)
b) A rise in expected import demand (5 points)
NOTE: Figures are needed!
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