Monetary neutrality implies that an increase in the quantity of money will
A)increase employment.
B)increase the price level.
C)increase the incentive to save.
D)not increase any of the above.

Question

Quizplus · Accepted Answer

Monetary neutrality suggests that changes in the money supply only affect nominal variables like the price level, not real variables like employment or savings incentives.

Monetary Neutrality Implies That an Increase in the Quantity of Money