Which of the Following Statements Is the Most Accurate? in General

question 43

Multiple Choice

Which of the following statements is the most accurate? In general, under the monetary approach to the exchange rate,

• A) the interest rate is not independent of the money supply growth rate in the short run.
• B) the interest rate is independent of the money supply growth rate in the long run.
• C) the interest rate is not independent of the money supply growth rate in the long run, but independent in the short run.
• D) the interest rate is not independent of the money supply growth rate in the long run.
• E) the interest rate is a factor of the money supply growth rate only in the short term.

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Definitions:

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