In the long run, one-time increases or decreases in the nominal money supply affect
A)real output, but not the price level.
B)the price level, but not real output.
C)both real output and the price level.
D)neither real output nor the price level.

Question

Quizplus · Accepted Answer

One-time increases or decreases in the nominal money supply only affect the price level in the long run, as real output is determined by factors such as technology, resources, and institutions. This is known as the neutrality of money in the long run.

In the Long Run, One-Time Increases or Decreases in the Nominal