In the long run, monetary expansion should have the following result:
A)nominal wages change in proportion to nominal money supply
B)real interest rates remain constant
C)real wages remain constant
D)nominal wages and prices change in proportion to nominal money supply
E)all of the above

Question

Quizplus · Accepted Answer

In the long run, monetary expansion is expected to lead to proportional changes in nominal wages and prices, as the economy adjusts to the increased money supply. This means that while nominal values change, real values such as real wages and real interest rates tend to remain constant, as they adjust for inflation. Therefore, all the options provided are correct outcomes of long-term monetary expansion.

In the Long Run, Monetary Expansion Should Have the Following