Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![9:54 , O M
O Vo) LTE
LTE1 ll
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Economics
Consider the effect of permanent change in
nominal money supply on the price and the
expected exchange rate in the short-run and the
long-run. Initially, the economy was in the long-run
equilibrium with P = 80cH, MS = 4000CH and Ee =
150CH/cF. Then, Home central bank permanently
changed the nominal money supply. Because of
the change, the real money supply would be 55 in
the short-run.
Answer the value of the nominal money supply in
the short-run and the expected exchange rate in
the long-run.
MS in short-run = ?
Ee in long-run = ?
Answer
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Transcribed Image Text:9:54 , O M
O Vo) LTE
LTE1 ll
v expert.chegg.com/expertqna
Chegg
Time remaining: 00:09:47
Economics
Consider the effect of permanent change in
nominal money supply on the price and the
expected exchange rate in the short-run and the
long-run. Initially, the economy was in the long-run
equilibrium with P = 80cH, MS = 4000CH and Ee =
150CH/cF. Then, Home central bank permanently
changed the nominal money supply. Because of
the change, the real money supply would be 55 in
the short-run.
Answer the value of the nominal money supply in
the short-run and the expected exchange rate in
the long-run.
MS in short-run = ?
Ee in long-run = ?
Answer
Skip
Exit
II
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