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Which of These Are Effects Following an Increase in the Supply

Question 47

Multiple Choice

Which of these are effects following an increase in the supply of money?


A) Speculators will anticipate that the higher supply of the domestic currency will cause the exchange rate to depreciate.
B) Part of the excess money balances will be used to purchase foreign assets.
C) The excess supply of money in the domestic money market will push down the rate of interest. This will reduce the return on domestic assets below that on foreign assets.
D) All of the above

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