Question: Using the same model as in C above, find the values of Ay and Ay if the money supply is increased in one country by

Using the same model as in C above, find the values of Ay and Ay if the money supply is increased in one country by the same amount as it reduced in the other.

(a) assuming fixed exchange rates, and

(b) assuming flexible exchange rates. Explain the mechanisms that bring about your results.

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