If money is neutral and velocity is stable,an increase in the money supply creates a proportional increase in
A)real output only.
B)nominal output only.
C)the price level only.
D)both the price level and nominal output.

Question

Quizplus · Accepted Answer

If money is neutral and velocity is stable, an increase in the money supply leads to a proportional increase in nominal output, which is reflected in both the price level and nominal output.

If Money Is Neutral and Velocity Is Stable,an Increase in the Money