If There Is a Temporary Increase in the Money Supply

question 80

Multiple Choice

If there is a temporary increase in the money supply in the Eurozone, ceteris paribus, what is the result for the United States?

• A) The money supply in the United States must decrease by the same proportion.
• B) The U.S. dollar nominal interest rate will increase, as the euro rate is unchanged.
• C) Long-run expectations shift to expect a stronger euro.
• D) The dollar appreciates against the euro.

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