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Classical Economists' Belief in the "Neutrality of Money" Led Them

Question 107

Multiple Choice

Classical economists' belief in the "neutrality of money" led them to argue that


A) absolute prices were determined in the real part of the economy.
B) the allocation of resources was determined by the quantity of money and not by the forces of supply and demand.
C) relative prices have no role in the real allocation of resources.
D) a change in the quantity of money would not affect money prices or relative prices.
E) a change in the quantity of money would change the price level but would not change relative prices.

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