In the long run,an increase in the growth rate of the money supply leads to an increase in both the real exchange rate and the amount of exports.

Question

Quizplus · Accepted Answer

An increase in the growth rate of the money supply typically leads to inflation, which can depreciate the real exchange rate (making the domestic currency weaker compared to foreign currencies) and might not necessarily increase the amount of exports, as it depends on the elasticity of demand for those exports.

In the Long Run,an Increase in the Growth Rate of the Money