Answer to Question #114687 in Finance for yash

Question #114687
“An increase in domestic relative to foreign nominal interest rates will lead to a domestic currency appreciation in some, but not all, of the following three models: (i) the flexible price monetary model (ii) the open-economy IS-LM model and (iii) the Dornbusch overshooting model”.
1
Expert's answer
2020-05-11T19:20:02-0400

An increase in domestic relative to foreign nominal interest rates will lead to a domestic currency appreciation in such models as the flexible price monetary model and the open-economy IS-LM model, but not in the Dornbusch overshooting model.


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