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Exogenous increase in the supply of money

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1. Consider an exogenous increase in the supply of money. What is the effct of this increase on the rate of interset? What is likely to happen to an equilibrium interset rate in the bond market and also to stock prices, and why?

2. Why do ypu think exports and inports repond more sharply to change in the real exchange rather than the nominal exchange rate? Define the real exchange rate.

Reference no: EM131542795

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