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PFEP

PFEP

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. (Behavior of currency substitution ratio under real shocks) Consider the model of section 15.2 for the following preferences: 1.0 a,[log (c,) + log(m,) + log(fi)] exp(-Bt)dt. Solve for a PFEP along which at increases at time T under both predetermined and flexible exchange rates.
Transcribed Image Text:2. (Behavior of currency substitution ratio under real shocks) Consider the model of section 15.2 for the following preferences: 1.0 a,[log (c,) + log(m,) + log(fi)] exp(-Bt)dt. Solve for a PFEP along which at increases at time T under both predetermined and flexible exchange rates.
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