How Might Changes in the Money Supply Be Non-Neutral in the Short

question 17

Multiple Choice

How might changes in the money supply be non-neutral in the short run?

• A) As the amount of money circulating in the economy changes before prices respond,the purchases of consumers change accordingly,which leads producers to change production levels.
• B) When money supply changes in the short run,it will affect nominal,but not real,variables in the short run.
• C) As money growth increases at a faster rate,it will cause real GDP to grow at an even faster rate.
• D) If producers expect inflation to increase,they will increase supply in order to sell before the arrival of inflation.

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