Question: Solve Consider the following model for exchange rate determination my - Pt = -n't mt d* - pt =-nut it - if = Etst+1 -

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Consider the following model for exchange rate determination my - Pt = -n't mt d* - pt =-nut it - if = Etst+1 - St Pt = KSt + Pt where my and m; are money demand (domestic and foreign respectively), Pt and pt are domestic and foreign prices, it and if are domestic and foreign nominal interest rates, s is the nominal exchange rate (the price of foreign currency in terms of domestic currency), 7 is a positive parameter,

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