The government of Waterland decides to increase the supply of money a lot in an effort to make the people happy. Which of the following is likely to be a consequence of this action?
a) There will be little if any impact on how much goods and services the citizens of Waterland can purchase with each dollar
b) The price level in Waterland will decrease
c) There will be an increase in how much goods and services the citizens of Waterland can purchase with each dollar
d) There will be a decrease in how much goods and services the citizens of Waterland can purchase with each dollar
e) All the other answers are incorrect Consider the foreign exchange market with two economics: United States and Europe. There are only two currencies Dollars in United States and Euro in Europe. Suppose that the equilibrium exchange rate changes so that you need fewer dollars to buy a Euro. From this situation we can conclude that At the new equilibrium the Dollar has depreciated in value At the new equilibrium the Euro has appreciated in value At the new equilibrium fewer Canadian goods will be demanded by people in Europe At the new equilibrium people in United States will buy fewer European goods All the other answers are incorrect