Problem
1. You observe that a country's currency depreciates but its current account worsens at the same time. What data might you look at to decide whether you are witnessing a J-curve effect? What other macroeconomic change might bring about a currency depreciation coupled with a deterioration of the current account, even if there is no J-curve?
2. A new government is elected and announces that once it is inaugurated, it will increase the money supply. Use the DD-AA model to study the economy's response to this announcement.
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.