The argument that changes in output cause changes in the money supply is known as
A)the liquidity effect.
B)the money multiplier effect.
C)reverse causation.
D)direct causation.

Question

Quizplus · Accepted Answer

Reverse causation in economics refers to a situation where what is usually considered as the effect influences the cause, in this context suggesting that changes in output (normally seen as influenced by the money supply) can in turn cause changes in the money supply itself.

The Argument That Changes in Output Cause Changes in the Money