When there is a permanent fall in the domestic money supply, the exchange rate:
A) falls in the short run and rises slightly in the long run.
B) falls in the short run and falls more in the long run.
C) rises in the short run and falls slightly in the long run.
D) rises in the short run and rises more in the long run.

Question

Quizplus · Accepted Answer

The Answer of When there is a permanent fall in the domestic money supply, the exchange rate:
A) falls in the short run and rises slightly in the long run.
B) falls in the short run and falls more in the long run.
C) rises in the short run and falls slightly in the long run.
D) rises in the short run and rises more in the long run.

When There Is a Permanent Fall in the Domestic Money