Classical Economists' Belief in the "Neutrality of Money" Led Them

question 75

Multiple Choice

Classical economists' belief in the "neutrality of money" led them to argue that

• A)a change in the quantity of money would change the price level but would not change relative prices.
• B)absolute prices were determined in the real part of the economy.
• C)relative prices have no role in the real allocation of resources.
• D)a change in the quantity of money would not affect money prices or relative prices.
• E)the allocation of resources was determined by the quantity of money and not by the forces of supply and demand.

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