State first whether each is TRUE/FALSE/UNCERTAIN and then briefly justify your answer.
In a closed economy where wages and prices are fully flexible an increase in the money supply increases the price level by the same proportion.
In an open economy with fixed prices, a fixed exchange rate and full international capital mobility, fiscal policy is ineffective.
If the rate of inflation is increasing from one year to the next, then the unemployment rate must be higher than its long run equilibrium.