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Please answer this using simple monetary model. Assume that real output growth in both the US and Mexico is g = g* = . 02.

Please answer this using simple monetary model.

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Assume that real output growth in both the US and Mexico is g = g* = . 02. If money growth in the US is u =. 04 and money growth in Mexico is u* =. 14, find the rates of inflation in both countries and the rate of depreciation or appreciation of the Mexico real relative to the dollar. (Use the simple monetary model)

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