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Suppose that the Central Bank of the country X can pursue a very reactive or very...

Suppose that the Central Bank of the country X can pursue a very reactive or very passive monetary policy to reach its goals of inflation targeting and economic stability.

Suppose that the Central Bank of the country X can pursue a very reactive or very passive monetary policy to reach its goals of inflation targeting and economic stability.
i.) Describe how the current exchange rate would change with recession expectations if the Central Bank pursues a very reactive monetary policy? (You should use relevant graphs and equations!)
ii.) Describe how the current exchange rate would change with recession expectations if the Central Bank pursues a very passive monetary policy? (You should use relevant graphs and equations!)
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