If an Increase in the Level of the Money Supply

question 13

Multiple Choice

If an increase in the level of the money supply results in a proportionate increase in prices with no effect on any real variables, we say that

• A) the Fisher relationship holds.
• B) money is neutral.
• C) money is superneutral.
• D) money is the most preferred store of value.
• E) money demand is neutral.

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Definitions:

Quantity of Goods

The total number of physical units of a product or commodity that are available in the market.

Desired by Society

Pertains to something that is widely regarded as beneficial or needed by the majority of the community or population.

Market Price

The current price at which an asset or service can be bought or sold in the open market.