For example, an increase in the money supply, areal variable, will cause the price level, anominal variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a variable. The notion that an increase in the quantity of money will impact the price level but not the output level is known as.

Question

Business

Karlee Bartlett

6 February, 17:49

For example, an increase in the money supply, areal variable, will cause the price level, anominal variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a variable. The notion that an increase in the quantity of money will impact the price level but not the output level is known as.

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Answers (1)

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Joey Mckay · Answer 1

The answer would be neutrality of money theory

Explanation:

The neutrality of money theory claims that changes in the money supply affect the prices of goods, services, and wages but not overall economic productivity. Many of today's economists believe the theory is still applicable, at least over the long run.