Monetary neutrality means that a change in the money supply
A)does not change real variables.Most economists think this is a good description of the economy in the short run and in the long run.
B)does not change real variables.Most economists think this is a good description of the economy in the long run but not the short run.
C)does not change nominal variables.Most economists think this is a good description of the economy in the short-run and the long run.
D)does not change nominal variables.Most economists think this is a good description of the economy in the long run but not the short run.

Question

Quizplus · Accepted Answer

Monetary neutrality suggests that changes in the money supply only affect nominal variables and not real variables in the long run, but not in the short run where prices and wages may be sticky.

Monetary Neutrality Means That a Change in the Money Supply