If monetary neutrality holds,then an increase in the money supply
A)increases real but not nominal variables.Most economists think that monetary neutrality is a good description of the short run.
B)increases real but not nominal variables.Most economists think that monetary neutrality is a good description of the long run.
C)increases nominal but not real variables.Most economists think that monetary neutrality is a good description of the short run.
D)increases nominal but not real variables.Most economists think that monetary neutrality is a good description of the long 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.

If Monetary Neutrality Holds,then an Increase in the Money Supply