In the short run, a permanent

In the short run, a permanent increase in the domestic money supply

A.has stronger effects on the exchange rate and output than an equal temporary increase.

B.has stronger effects only on the exchange rate but not on output than an equal temporary

C.has weaker effects on the exchange rate and output than an equal temporary increase.

D.has stronger effects on output, but lower effect the exchange rate than an equal temporary increase.

E.None of the above.

Answer: A