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The Federal Reserve sets the target growth rate of money (M1) at 2% from now until...

The Federal Reserve sets the target growth rate of money (M1) at 2% from now until the end of next year, while the European Central Bank (ECB) sets its target growth rate of money at 7% during the same period. The current spot rate is $1.12 per euro. SHOW WORK PLEASE

a) What do you expect will be the spot rate at the end of this year? Explain why.

b) Which theory do you apply for your forecasting?

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