If monetary neutrality holds, then an increase in the money supply
a. increases real but not nominal variables. Most economists think that monetary neutrality is a good description of the short run.
b. increases real but not nominal variables. Most economists think that monetary neutrality is a good description of the long run.
c. increases nominal but not real variables. Most economists think that monetary neutrality is a good description of the short run.
d. increases nominal but not real variables. Most economists think that monetary neutrality is a good description of the long run.
d
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Refer to Figure 11.5. An increase in the level of investment is best illustrated by diagram
A) A. B) B. C) C. D) D.
Martha used to pay for her expenses with her own hard-earned money. She always tried to spend as little as she could. However, she started spending more when she received a scholarship . This behavior is an example of ________
A) moral hazard B) a pecuniary externality C) the free-rider problem D) the paradox of thrift