Assume that the level of capital flows between the U.S. and the country of Krendo is negligible
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Assume that the level of capital flows between the U.S. and the country of Krendo is negligible (close to zero) and will continue to be negligible. In contrast, a substantial amount of trade occurs between the U.S. and the country of Krendo. How will high inflation and high interest rates affect the value of the kren (Krendo’s currency)? Explain.
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