D Question 30 1 pts The long run effects of money supply change: O no effect on

Question

D Question 30 1 pts The long run effects of money supply change: O no effect on the long-run values of the interest rate or real output, a proportional change in the price level's long-run value in the same direction. O no effect on the long-run values of the interest rate or real output, no change in the price level's long-run value. o ambiguous effect on the long-run values of the interest rate or real output, a proportional change in the price level's long-run value in the opposite direction. proportional effect on the long-run values of the interest rate or real output, a proportional change in the price level's long-run value n the same direction. o ambiguous effect on the long-run values of the interest rate or real output, A disproportional change in the price level's long-run value in the same direction O D Question 31 1 pts After a permanent increase in the money supply O the exchange rate smoothly depreciates in the short run. O the exchange rate overshoots in the short run. O the exchange rate remains the same. O the exchange rate smoothly appreciates in the short run. O the exchange rate overshoots in the long run. Question 32 1 pts How does an increase in the real exchange rate affect exports and imports? O Exports increase: imports decrease Exports increase; imports change ambiguously Exports decrease imports increase Exports increase: imports are constant. O

Explanation / Answer

30) A. According to quantity theory of money an increase in money supply only increases the price because rwal output remains same at full employment level.

31)B. After a change in money supply initially exchange rate overshoot.

32)C. Appreciation or increase in real exchange rate will increase import and decrease export.

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