An increase in a country's money supply causes
A) its currency to appreciate in the foreign exchange market while a reduction in the money supply causes its currency to depreciate.
B) its currency to depreciate in the foreign exchange market while a reduction in the money supply causes its currency to appreciate.
C) no effect on the values of it currency in international markets.
D) its currency to depreciate in the foreign exchange market while a reduction in the money supply causes its currency to further depreciate.
E) its currency to depreciate in the domestic market and appreciate in the foreign market.
Question 2
Free trade is better than protection for a small country.
Indicate whether the statement is true or false
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