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According to the long run money market model, if money supply is growing at 4% in...

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Economics

According to the long run money market model, if money supply isgrowing at 4% in the

United States and 5% in the United Kingdom, while real GDP isrising at 2% in the United States, and at

1% in the United Kingdom, what will happen to the nominalexchange rate between USD and British

pound? What is the rate of expected depreciation?

Answer & Explanation Solved by verified expert
3.8 Ratings (647 Votes)
ANSWER Amount Theory of Money is the adjustment in cash development causes an equivalent change in expansion rate As indicated by the Quantity hypothesis of cash over the long haul when cash supplyM increment then speed of moneyV remains and constantP speaks    See Answer
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