Multiple Choice
If there is a permanent increase of 8% in the domestic money supply, then which of the following will be true in the long run?
A) Prices will decrease by 8%.
B) Prices will increase by 4%.
C) The home country currency will depreciate by 8%.
D) The home country currency will appreciate by 4%.
Correct Answer:
Verified
Correct Answer:
Verified
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