Under Fixed Exchange Rate, in General Which One of the Following

question 37

Multiple Choice

Under fixed exchange rate, in general which one of the following statements is the MOST accurate?

• A) The following condition should hold for domestic money market equilibrium: Mˢ/P = L(R*, Y).
• B) The following condition should hold for domestic money market equilibrium: Mᵈ/P = L(R*, Y).
• C) The following condition should hold for domestic money market equilibrium: Mˢ = L(R*, Y).
• D) The following condition should hold for domestic money market equilibrium: P = L(R*, Y).
• E) The following condition should hold for domestic money market equilibrium: R*Mᵈ/P = L(Y).

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