Expansionary monetary policy will increase nominal GDP
A)in the Keynesian case
B)in the classical case
C)in the medium run
D)all of the above
E)only A and C

Question

Quizplus · Accepted Answer

Expansionary monetary policy, which involves increasing the money supply and lowering interest rates, can increase nominal GDP in various economic frameworks and over different time horizons. This includes the Keynesian case, where increased spending leads to higher output and employment; the classical case, where it might primarily affect prices in the long run; and in the medium run, as the economy adjusts to new levels of spending and prices.

Expansionary Monetary Policy Will Increase Nominal GDP