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Q. Using 4 different figures, plot the time paths showing the effects of a permanent increase in the United States money supply on:
A. U.S. money supply.
B. the dollar interest rate.
C. the U.S. price level.
D. the dollar/euro exchange rate.
Answer: The below given figures are displays the time path that showing the effects of a permanent increase in the United States money supply on following
• U.S. money supply.
• The dollar interest rate.
• The U.S. price level.
• The dollar/euro exchange rate.
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