If money supply increases, P will rise as long as V and Q remain constant

If the euro replaces the U.S. dollar as the world's most popular currency, that will likely ________

A) reduce M1, without affecting M2 B) reduce M2, without affecting M1 C) cause a temporary increase in M1 D) affect neither M1 nor M2 E) none of the above

The net exports effect exists because a:

a. higher price level will reduce interest rates and stimulate foreign investment. b. lower price level will make domestically produced exports less expensive relative to foreign goods. c. higher price level will reduce the purchasing power of money. d. lower price level will encourage Americans to import more foreign goods.