Under the monetary approach to the exchange

Under the monetary approach to the exchange rate theory, money supply growth at a constant rate

A.eventually results in ongoing price level deflation at the same rate, but changes in this long-run deflation rate do not affect the full-employment output level or the long-run relative prices of goods and

B.eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do affect the full-employment output level and the long-run relative prices of goods and services.

c.eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do not affect the full-employment output level or the long-run relative prices of goods and services.

D.eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do not affect the full-employment output level,only the long-run relative prices of goods and services.

E. None of the above statements is true.

Answer: C