According to the Classical Model,an Increase in the American Nominal

question 7

Multiple Choice

According to the classical model,an increase in the American nominal money supply would cause the nominal exchange rate to ________ and the real exchange rate to ________.

• A)depreciate; appreciate
• B)appreciate; depreciate
• C)depreciate; remain unchanged
• D)appreciate; remain unchanged

---

Definitions:

Business Combination

The process of bringing two or more separate companies together under common control or ownership.

Negative Goodwill

Occurs when the purchase price of a company is less than the fair value of its net assets, often reflecting a bargain purchase.

Acquisition Method

An accounting approach used to consolidate the financial statements of two companies when one acquires control over the other.

Unrealized Gain

An increase in the value of an asset that has not been sold, reflecting a potential profit that is not yet realized.