In the long run, an increase in the money supply tends to have an effect on real variables but no effect on nominal variables.

Question

Quizplus · Accepted Answer

An increase in the money supply tends to have an effect on both real and nominal variables. Real variables such as output and employment can be affected by changes in the money supply, while nominal variables such as prices and wages can also be influenced.

In the Long Run, an Increase in the Money Supply