In the Long Run, When Money Is Neutral, Which of the Following

question 3

Multiple Choice

In the long run, when money is neutral, which of the following increases when the money supply growth rate increases?

• A) real output growth
• B) real interest rates
• C) nominal interest rates
• D) the money supply divided by the price level

---

Definitions:

Static Budget

A budget that is set for a specific level of activity and does not change or adjust with the actual level of activity achieved.

Fixed Manufacturing Overhead

The set costs involved in producing a product that do not change with the level of production, such as rent, salaries, and utilities.

Master Budget

A comprehensive financial plan comprising various individual budgets covering all facets of an organization's operations.

Machine Hours

A measure of the amount of time a machine is operated, used in manufacturing to allocate costs based on machine usage.