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An Expansion of the Domestic Money Supply

Question 24

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An expansion of the domestic money supply


A) will increase aggregate demand under a fixed rate system.
B) will have no effect on aggregate demand under a flexible rate system.
C) will lead to an inflow of short-term capital under fixed exchange rates.
D) will lead to an expansion of aggregate demand and to upward pressure on domestic Prices under a flexible rate system.

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