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kindly solve. economics Compare the short and long run effects on the depreciation rate of the domestic currency for the following independent shocks. Expectations are
kindly solve. economics
Compare the short and long run effects on the depreciation rate of the domestic currency for the following independent shocks. Expectations are adaptive.
a. The foreign money growth rate rises. (5)
b. The price of oil experiences a transitory rise. Assume the domestic economy is more dependent on oil than the foreign economy. (5)
c. For the shock in (a) compare short and long run depreciation of the domestic currency if investors have Rational Expectations. (10)
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