If fears of a terrorist attack are widespread and people lose faith in money, the economy could revert to a system of

In the monetary small open-economy model with a fixed exchange rate, an increase in the exchange rate has which impact on domestic money demand?

A) It increases it. B) It decreases it. C) It has no impact. D) It depends.

When negative externalities are present, it leads to an underallocation of resources in that area relative to that which is socially desirable

a. True b. False Indicate whether the statement is true or false