After the start of the War in the Ukraine, economists expected the Russian Currency, the Ruble, to depreciate against the Euro and the Dollar.
a. Using the long run model of exchange rate determination developed in class, why did economists expect the ruble to depreciate? Be as precise as you can.
b. In fact, the ruble has appreciated by 20 percent against all major currencies! Using the short run model developed in class how would you explain this appreciation.