International Economics 14th Edition by Thomas Pugel

تمرين 4

Describe the effects of a sudden decrease in the domestic demand for holding money (a shift from wanting to hold domestic money to wanting to hold domestic bonds) on our domestic product and income under floating exchange rates. Is the change in domestic product and income greater or less than it would be under fixed exchange rates ( Hint: A decrease in the demand for money is like an increase in the supply of money.)