Monetary Neutrality Means That a Change in the Money Supply

question 225

Multiple Choice

Monetary neutrality means that a change in the money supply

• A)does not change real GDP.Most economists think this is a good description of the economy in the short run and in the long run.
• B)does not change real GDP.Most economists think this is a good description of the economy in the long run but not the short run.
• C)does change real GDP.Most economists think this is a good description of the economy in the short-run and the long run.
• D)does change real GDP.Most economists think this is a good description of the economy in the long run but not the short run.

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Definitions:

Synergies

The additional value created by combining two or more companies or assets, expected to lead to greater efficiency or profitability.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Pre-Merger Market

The financial and economic conditions affecting companies and their stock prices before they undergo a merger.

External Growth

Expansion of a business through acquiring or merging with other companies, as opposed to internal growth through increasing sales, product lines, or efficiencies.