A permanent increase in the domestic money supply

A.must ultimately lead to a proportional decrease in E, and, therefore, the expected future exchange rate must rise

B.must ultimately lead to a proportional decrease in E, and, therefore, the expected future exchange rate must decrease

C.must ultimately lead to a proportional rise in E, and, therefore, the expected future exchange rate must rise

D.must ultimately lead to a proportional rise in E, and, therefore, the expected future exchange rate must rise more than

E.must ultimately lead to a proportional rise in E, and, therefore, the expected future exchange rate must rise less than

Answer: C

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