What is an implication of the neutrality of money in the long run?. (a) The economy's level of potential output will adjust to accommodate any change in the money supply. (b) Changes to the money supply have no effect on either the price level or real GDP. (c) In response to any change in the money supply, the demand for money will adjust to cancel out its effects on all macroeconomic variables. (d) In response to any change in the money supply, the economy's adjustment process will bring Y back to Y*, which is unaffected by the change in the money supply. (e) Changes to the money supply never have any effect on real GDP.

What is an implication of the neutrality of money in the long run?. (a) The economy's level of potential output will adjust to accommodate any change in the money supply. (b) Changes to the money supply have no effect on either the price level or real GDP. (c) In response to any change in the money supply, the demand for money will adjust to cancel out its effects on all macroeconomic variables. (d) In response to any change in the money supply, the economy's adjustment process will bring Y back to Y*, which is unaffected by the change in the money supply. (e) Changes to the money supply never have any effect on real GDP.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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