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Let the price level in the Home country be P = 4.20 and let the price level in the Foreign country be Pi = 3.0:}.

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Let the price level in the Home country be P = 4.20 and let the price level in the Foreign country be Pi" = 3.0:}. According to the monetarist approach to exchange rates, what is the equilibrium exchange rate [domestic per foreign currency}? If the Foreign economy decreases its interest rate, will this exchange rate increase or decrease? Select one: 0 a. 1.40, increase. 0 b. 0321 increase. 0 c. 0.?2, decrease. 0 d. 1.4 0, decrease

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