4. Present and explain the Fundamental Equation of the Monetary Approach.
5. What are the predictions for the long run of the Monetary Approach?
9. Discuss the effects of ongoing inflation based on the PPP theory.
10. Describe and explain the relationship between expected inflation rates in two countries and their interest rate differential according to the PPP theory.
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11. What is the Fisher Effect? Provide an example.
12. To answer the following question, please refer to the figure below. Concentrating only at the lower right quadrant, discuss the effects of a change in U.S. expected inflation.