According to classical macroeconomic theory,changes in the money supply affect
A)variables measured in terms of money and variables measured in terms of quantities or relative prices
B)variables measured in terms of money but not variables measured in terms of quantities or relative prices
C)variables measured in terms of quantities or relative prices,but not variables measured in terms of money
D)neither variables measured in terms of money nor variables measured in terms of quantities or relative prices

Question

Quizplus · Accepted Answer

Classical macroeconomic theory posits that changes in the money supply affect nominal variables (measured in terms of money) but not real variables (measured in terms of quantities or relative prices), due to the neutrality of money in the long run.

According to Classical Macroeconomic Theory,changes in the Money Supply Affect