Under the Monetary Approach to Exchange Rate Theory, Money Supply

question 17

Multiple Choice

Under the monetary approach to exchange rate theory, money supply growth at a constant rate

• A) eventually results in ongoing price level deflation at the same rate, but changes in this long-run deflation rate do not affect the full-employment output level or the long-run relative prices of goods and services.
• B) eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do affect the full-employment output level and the long-run relative prices of goods and services.
• C) eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do not affect the full-employment output level or the long-run relative prices of goods and services.
• D) eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do not affect the full-employment output level, only the long-run relative prices of goods and services.
• E) eventually results in ongoing price level deflation at the same rate, but changes in this long-run deflation rate do not affect the full-employment output level, only the long-run relative prices of goods and services.

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Definitions:

Premature Ejaculation

A sexual dysfunction characterized by ejaculation that always or nearly always occurs prior to or within about one minute of vaginal penetration, or, the inability to delay ejaculation on all or nearly all vaginal penetrations.

Genito-Pelvic Pain/Penetration Disorder

A sexual dysfunction characterized by significant pain during intercourse or penetration attempts, causing distress or relational difficulties.

PDE-5 Inhibitors

A class of drugs that are used to treat erectile dysfunction by enhancing the effects of nitric oxide, increasing blood flow to the penis.