Question: true or false, or partly true and partly false; state which is the case and give your reasons Under flexible exchange rates, a jump in
true or false, or partly true and partly false; state which is the case and give your reasons
Under flexible exchange rates, a jump in a country's nominal interest rate may be associated with either a spot depreciation or a spot appreciation of its currency. (For simplicity assume throughout that the consumption preference parameter alpha equals one, so that the price index and the domestic output price coincide.)
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