The whole what goes up when another goes down is getting my dizzy. I was hoping someone knows this junk cold. If the Money Supply Increase- Then inflation, real rates, nominal rates, currency ??? If Inflation Increass - Then real rates, nominal rates, currrency ???
nominal = real plus inflation money supply goes up is adding liquidity which should drive rates down. lower rates drives down foreign demand for a currency because an investor can earn a higher rate someplace else.