In the long run, an increase in the quantity of money, other things remaining the same,
A) decreases the price level.
B) has no effect on the price level or real GDP.
C) decreases real GDP.
D) increases real GDP.
E) increases the price level.

Question

Quizplus · Accepted Answer

In the long run, an increase in the quantity of money, with other factors held constant, typically leads to inflation, which means an increase in the price level. This is because more money chasing the same amount of goods and services tends to push prices up.

In the Long Run, an Increase in the Quantity of Money