### Using the fundamental equations from the simple monetary

##### Reference no: EM13898820

Using the fundamental equations from the simple monetary approach, describe how each of the following will affect the home and foreign price level, real money balances, and the exchange rate, EH/F . Also, state whether the home currency appreciates or depreciates for each.

(a) An increase in the home money supply

(b) An increase in the foreign money supply

(c) An increase in the home real income

(d) An decrease in the foreign real income

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