, with , and . denotes the logarithm of nominal money demand, the logarithm of the price level, the logarithm of

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answerhappygod
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, with , and . denotes the logarithm of nominal money demand, the logarithm of the price level, the logarithm of

Post by answerhappygod »

,
with , and . denotes the
logarithm of nominal money demand, the logarithm of the
price level, the logarithm of real
income, the logarithm of real
wealth, and the nominal interest
rate. The corresponding real money demand function in the foreign
country is as follows:
where * denotes magnitudes in the
foreign country.
Using the
flexible-price monetary model of the exchange rate answer the
following questions:
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