Advanced Placement (AP), 14.11.2020 09:40, LindseyN1

The government of Atlantis engaged in expansionary fiscal policy that resulted in an increase in the price level. What will be the impact of the increase in the price level in Atlantis on the foreign exchange market for the Atlantian dollar and the exchange rate for the Atlantian dollar?
Choose 1
A. The demand for the Atlantian dollar increases; the Atlantian dollar appreciates
B. An increase in the price level in Atlantis will have no impact on the foreign exchange market for the Atlantian dollar
C. The demand for the Atlantian dollar decreases; the Atlantian dollar depreciates
D. The supply of the Atlantian dollar decreases; the Atlantian dollar appreciates
E. The supply of the Atlantian dollar decreases; the Atlantian dollar depreciates

Answers: 2

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The government of Atlantis engaged in expansionary fiscal policy that resulted in an increase in the...