The Difference Between the Simple Monetary Model and the General

Multiple Choice

The difference between the simple monetary model and the general monetary model of exchange rate determination in the long run is that:

A) the simple model refers to only one nation, while the general model includes all nations.
B) the simple model has only one equation, while the general model includes a number of simultaneous equations.
C) the simple model assumes a constant demand function for real balances, while the general model assumes that the demand for real balances is a decreasing function of the nominal interest rate.
D) the general model applies to increases and decreases in the relevant variables; the simple model does not allow relevant variables to decrease.