With respect to real output, in the long run, money is:
A) expansionary.
B) velocity.
C) temporary.
D) neutral.

Question

Quizplus · Accepted Answer

In the long run, changes in the money supply do not affect real output or employment, meaning money is neutral. This concept is known as the neutrality of money. While changes in the money supply can have short-term impacts on output, in the long run, the economy adjusts and returns to its natural level of output.

With Respect to Real Output, in the Long Run, Money