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Author Question: If the exchange rate is constant and U.S. imports increase, then in the foreign exchange market the ... (Read 175 times)

moongchi

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on: Jun 29, 2018
If the exchange rate is constant and U.S. imports increase, then in the foreign exchange market the
 
  A) quantity of U.S. dollars supplied increases.
  B) supply of U.S. dollars increases.
  C) supply of U.S. dollars decreases.
  D) demand for U.S. dollars increases.
  E) quantity of U.S. dollars supplied decreases.

Question 2

According to the quantity theory of money, what is the effect of an increase in the quantity of money?
 
  What will be an ideal response?


mtmmmmmk

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Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

According to the quantity theory, in the long run an increase in the quantity of money brings an equal percentage increase in the price level.


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