Keynes hypothesized that the transactions component of money demand was primarily determined by the level of

An increase in the demand for dollars on the foreign exchange market, all else equal, will result in:

A) appreciation of the U.S. dollar and depreciation of the foreign currency. B) appreciation of the U.S. dollar and appreciation of the foreign currency. C) depreciation of the U.S. dollar and depreciation of the foreign currency. D) depreciation of the U.S. dollar and appreciation of the foreign currency.

When the capital (a fixed input) changes

A) short-run marginal costs rise. B) short-run average total costs fall but do not shift. C) labor inputs decline. D) the short-run average total cost curve shifts.