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Explain How Each of the Following Will Affect the Relative \bullet

Question 133

Essay

Explain how each of the following will affect the relative values of the dollar and the euro used in France:
\bullet Income growth higher in the United States than in \bullet Inflation higher in France than in the United States.
\bullet A real interest rate higher in the United States than in France.

Correct Answer:

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Income growth higher in the United State...

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