Even though monetary policy is neutral in the short run, it may have profound real effects in the long run.

Name: Even though monetary policy is neutral in the short run, it may have profound real effects in the long run.
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Question

Quizplus · Accepted Answer

Monetary policy is typically considered neutral in the long run, meaning it does not have a permanent effect on real variables such as output or employment, but it can have significant real effects in the short run due to price and wage rigidities.

Even Though Monetary Policy Is Neutral in the Short Run