Problem
In our discussion of short-am exchange rate overshooting, we assumed that real output was given. Assume instead that an increase in the money supply raises real output in the short tun. How does this affect the extent to which the exchange rate overshoots when the money supply first increases? Is it likely that the exchange rate mukrshoots?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.