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In the Dornbusch model, following an increase in the money supply, after the initial reaction, and during the transition to the new long run equilibrium
In the Dornbusch model, following an increase in the money supply, after the initial reaction, and during the transition to the new long run equilibrium
A. the exchange rate(direct quote) will be falling. the rate of interest will be rising and the prive level will be rising
B. the exchange rate(direct rate) will be rising. the rate of interest will be falling and the price level will be rising
C. the exchange rate(direct quote) will be rising. the rate of interest will be rising and the price level will be rising.
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