Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.
QUESTION
Suppose that reduced barriers to international financial transactions cause an increase in the economy's supply of capital.
1. Suppose that reduced barriers to international financial transactions cause an increase in the economy's supply of capital. Explain, step-by-step, how the economy adjusts to arrive at a new long-run equilibrium.
2. How does an increase in inflation affect the nominal exchange rate?
II NEED HELP IN ANSWERING THESE QUESTIONS
