In the long run,the key reason that money is neutral is that
A) the federal budget is balanced.
B) prices are flexible.
C) business cycles have become much milder.
D) the nominal interest rate must equal the real interest rate.
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.
In the long run,one-time increases or decreases in the nominal money supply affect
A) real output, but not the price level.
B) the price level, but not real output.
C) both real output and the price level.
D) neither real output nor the price level.
The Federal Reserve pursued an expansionary monetary policy during 1964 in order to
A) pull the United States out of a deep recession.
B) counteract the effects of a deep cut in federal income taxes.
C) keep interest rates from rising.
D) bring down the inflation rate.