(Open Economy) Purchasing power parity suggests a relationship between the nominal exchange rate and the price level in each country.

a) If one country increases its nominal money supply by 10% (and the other does not), what will be the impact on the nominal exchange rate?

b) If both countries increase their nominal money supply by 10%, what will be the impact on the nominal exchange rate?

c) For a) and b) use the IS-LM-FE model to analyze the effect on Y, r, and P.