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Present and explain the Fundamental Equation of the Monetary Approach.
Answer: Suppose E$/E = PUS/PE and that domestic price levels depend on domestic money demands and supplies:
PUS = MSUS/L(R$, YUS) PE = MSE/L(RE, YE)
So the exchange rate is completely determined in the long run by the relative supplies of those excise and the relative real demands for them. Alters in interest rates and output levels affect the exchange rate only through their influence on money demand.
Hepburn’s Speed Model, the coefficients of vehicles are indicated for C and D. As the chief of operations in your organization, you are responsible for presenting the yearly budget
Q. What are the predictions for the long run of the Monetary Approach? Answer: Money supplies- Known the equations E $/E = P US /P E P US = M S US /L(R $
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