When studying the short run, the assumption of money neutrality is
A) not appropriate.
B) increasingly important.
C) still relevant but the classical dichotomy no longer holds.
D) Both b and c are correct.

Question

Quizplus · Accepted Answer

The assumption of money neutrality does not hold in the short run, therefore it is not appropriate to assume it in short-run analysis.

When Studying the Short Run, the Assumption of Money Neutrality