Question
Suppose there is a decrease in real money demand [L(R,Y)] in the U.S and a decrease in nominal money supply (M*) in Europe. Using the
Suppose there is a decrease in real money demand [L(R,Y)] in the U.S and a decrease in nominal money supply (M*) in Europe. Using the generalized model of exchange rate determination in the long run, explain what happens to the E$/ exchange rate in the long run.
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International Economics
Authors: Robert C. Feenstra, Alan M. Taylor
3rd edition
978-1429278515, 142927851X, 978-1319029517, 1319029515, 978-1429278447
