Suppose That Monetary Neutrality and the Fisher Effect Both Hold

question 26

Multiple Choice

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

• A)the inflation rate and growth of real GDP.
• B)the inflation rate but not the growth rate of real GDP.
• C)the growth rate of real GDP,but not the inflation rate.
• D)neither the inflation rate nor the growth rate of real GDP.

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Definitions:

Response

A reaction or answer provided after receiving stimuli or information.

Dishabituation

An increase in responsiveness when something novel is presented, following a series of presentations of something familiar.

Visual Presentation

The display of information or data through visual means, such as charts, graphs, images, or videos, to enhance understanding or retention.

Responsiveness

The quality of reacting quickly and positively to stimuli or changes.