Suppose That Monetary Neutrality and the Fisher Effect Both Hold

question 94

Multiple Choice

Suppose that monetary neutrality and the Fisher effect both hold.An increase in the money supply growth rate raises.

• A)the inflation rate and real interest rates.
• B)the inflation rate, but not real interest rates.
• C)real interest rates, but not the inflation rate.
• D)neither the inflation rate nor real interest rates.

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