The proposition of long- run neutrality of money is supported by evidence over more than fifty years and many countries that there is a positive relationship between

Question

Quizplus · Accepted Answer

The long-run neutrality of money suggests that changes in the money supply only affect nominal variables like inflation, not real variables like real GDP. Empirical evidence supports a positive relationship between inflation rates and money supply growth over the long term.

The Proposition of Long- Run Neutrality of Money Is Supported