Which of the Following Best Characterizes the Effects of Monetary

question 79

Multiple Choice

Which of the following best characterizes the effects of monetary policy?

• A)Monetary policy is neutral in both the short run and the long run; therefore, it does not affect real variables.
• B)Monetary policy is neutral in the long run, but it may have effects on real variables in the short run.
• C)Monetary policy has profound effects on real variables in both the short run and the long run.
• D)Monetary policy has profound effects on real variables in the long run, but is neutral in the short run.

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