Monetary Neutrality Implies That a Decrease in the Money Supply

question 108

Multiple Choice

Monetary neutrality implies that a decrease in the money supply will:

• A) not affect the price level.
• B) increase real GDP.
• C) decrease real interest rates.
• D) not affect unemployment.

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Definitions:

Cent

A monetary unit equal to one hundredth of a dollar or other unit of currency.

Evaluate

To assess or determine the value, significance, or condition of something through analysis or calculation.

Nearest Cent

The nearest cent is a rounding approach where prices or amounts are rounded up or down to the nearest one-hundredth of a dollar.

Evaluate

To carefully assess or appraise the value, quality, or performance of someone or something.