In 1981, the Reagan administration employed a policy that included tax ____ while at the same time the Federal Reserve's strategy was to combat ____

In the figure above, in the long run what happens if the Fed increases the quantity of money by 5 percent?

A) The value of money rises by 5 percent. B) The nominal interest rate rises by 5 percent. C) The price level rises by 5 percent and the LRMD shifts leftward. D) The value of money falls by 5 percent and there will be a movement down along the LRMD curve. E) The real interest rate falls and the LRMD curve shifts rightward.

If a nation is selling more goods and services to foreigners than it is buying from them, then on net it must be selling assets abroad

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