According to Keynesians,the primary reason money is not neutral is
A)rational expectations.
B)price stickiness.
C)reverse causation.
D)misperceptions over the aggregate price level.

Question

Quizplus · Accepted Answer

Keynesians believe that prices are sticky or slow to adjust, particularly in the short-run. Therefore, changes in the money supply can have an impact on output and employment in the short-run, since prices are not able to adjust immediately to changes in demand. This is why Keynesians argue that money is not neutral in the short-run.

According to Keynesians,the Primary Reason Money Is Not Neutral Is