With money supply shocks in the intertemporal model with money, the price level is
A) procyclical.
B) acyclical.
C) countercyclical.
D) somewhat cyclical.
Question 2
Under a fixed exchange rate system, at high domestic real interest rates the demand for domestic currency ________, so the central bank ________ foreign-exchange reserves.
A) increases; acquires
B) increases; loses
C) decreases; acquires
D) decreases; loses