The proposition of monetary neutrality states that changes in the money supply have:
A) no impact on output in the short run
B) no impact on output in the long run
C) no impact on the price level in the short run
D) no impact on the price level in the long run
B
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Why do people keep currency in their pockets when bank deposits pay interest?
A) Because banks might steal your money. B) Because currency is more liquid. C) Because bank deposits lose value due to inflation. D) Because bank deposits lose value due to changes in interest rates.
Consider the nations of Brazil, Mexico, and Pakistan. Over the past century, which of these three nations has experienced, by far, slower economic growth than the other two nations?
In a self-regulating economy, wages will fall and prices will rise when there is an inflationary gap
Indicate whether the statement is true or false
According to classical economists, if there is a 12% increase in the money supply, what will happen to the price level?
a) The price level will increase by 6%. b) The price level will decrease by 6%. c) The price level will increase by 12%. d) The price level will decrease by 12%.