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Problem 5 Consider the endowment version of the TNT model. Suppose the endowment of tradables increases in period 1. Analyze the effect of this innovation

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Problem 5 Consider the endowment version of the TNT model. Suppose the endowment of tradables increases in period 1. Analyze the effect of this innovation on the real exchange rate in periods 1 and 2 depending on whether the change in the tradable endowment is temporary or permanent

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