According to AD-AS model,the primary long-run effect of increases in the money supply is
A) a higher price level.
B) higher GDP.
C) a lower price level.
D) lower GDP.
According to the aggregate demand-aggregate supply model,what is the short-run impact of a reduction in the money supply by the Fed?
A) Current output will fall, but the price level will rise.
B) Current output will rise, but the price level will fall.
C) Current output and the price level will both rise.
D) Current output and the price level will both fall.
Monetary neutrality refers to the fact that changes in the money supply
A) affect output more in the long run than in the short run.
B) have no effect on output in the long run.
C) affect only output in the long run.
D) have a greater effect on prices in the short run than in the long run.
When economists state that money is neutral in the long run,they mean that in the long run
A) fluctuations in the money supply are equally likely to lead to recessions as to expansions.
B) changes in the money supply have the same impact on the rich as they do on the poor.
C) the level of output is independent of the nominal money supply.
D) the price level is independent of the nominal money supply.