The Idea That the Money Supply Does Not Affect Real

question 126

Multiple Choice

The idea that the money supply does not affect real economic variables is called

• A) adaptive expectations theory.
• B) monetary neutrality.
• C) the Phillips curve.
• D) contractionary monetary policy.
• E) expansionary monetary policy.

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Definitions:

Human Capital

The knowledge and skills that workers acquire through education and on-the-job training

Technology

The application of scientific knowledge for practical purposes, especially in industry and in the creation of goods and services.

Long Run

A period in which all factors of production and costs are variable, and firms can adjust all inputs and technology to reach a desired output level.

Output

The total amount of goods or services produced by a person, machine, business, or economy.