18. Consider our simple monetary approach model of flexible exchange rates. A rise in domestic income

a. Lowers relative income

b. Lowers relative money demand

c. Raises relative prices

d. Depreciates the exchange rate

e. None of the other responses

19. Consider a small open economy with floating exchange rates and perfect capital mobility. A monetary expansion eventually leads to

a. An increase in the domestic price level

b. A depreciation of domestic currency

c. No change in the level of GDP

d. No change in the composition of GDP

e. All of these responses are correct

GiVe explanation