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Hi John.
Could you give me some insight on some of the Chp 22 revision questions? I would really appreciate it.
1. “If a country’s exchange rate falls, domestic inflation rises”. What is the rationale here? (I do not understand why this would be the case).
2. “Inflation rates are a better predictor than interest rates of future exchange rates”. Again, in simple terms, why is that?
Thank you.
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