Quizzol

QUESTION:

If money is neutral, _______.

a. a change in the money supply reduces velocity proportionately; therefore, there is no effect on either prices or real output

b. a change in the money supply only affects real variables such as real output

c. a change in the money supply only affects nominal variables such as prices and dollar wages

d. the money supply cannot be changed because it is tied to a commodity such as gold

e. an increase in the money supply does nothing

ANSWER:

c. a change in the money supply only affects nominal variables such as prices and dollar wages

Posted by Cleveland on September 10, 2024