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Suppose the Fed increases the money supply and markets believe that the increase is temporary.Assume that prices are sticky in the short run.What will be
Suppose the Fed increases the money supply and markets believe that the increase is temporary.Assume that prices are sticky in the short run.What will be the short run effect on US interest rates, US prices, UK interest rates, and the dollar price of a pound (E$ )?Use well labeled diagrams of the US money market and foreign exchange market to explain your answer.
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