Which of the following does NOT occur when a country with floating exchange rates increases the money supply?
A. The current account initially tends to worsen.
B. The interest rates changes, causing real spending, production, and income to fall.
C. The interest rate changes, causing capital outflows in the short run.
D. Aggregate demand increases, which leads to an increase in the price level.
Answer: B
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A) greater, increase B) greater, decrease C) less, increase D) less, decrease
What is the age-earnings cycle? What is the typical age-earnings profile for a U.S. resident?
What will be an ideal response?
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