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Suppose that Malaysian inflation is 5 percent, Japanese money supply growth is 10 percent, Japanese money demand growth is 4 percent, and the rate of
Suppose that Malaysian inflation is 5 percent, Japanese money supply growth is 10 percent, Japanese money demand growth is 4 percent, and the rate of appreciation of the Malaysian ringgit/Japanese yen nominal exchange rate is -2 percent. According to the real exchange rate model, what is the rate of depreciation of the Malaysian ringgit/Japanese yen real exchange rate? Please show your work.
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