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In Economies with Persistently High Inflation, an Increase in the Money

Question 25

Multiple Choice

In economies with persistently high inflation, an increase in the money supply will have:


A) a positive effect on the real quantity of money in the long run.
B) a negative effect on the real quantity of money, as the aggregate price level increases by more than the money supply.
C) a positive effect on the aggregate real output in the long run.
D) no effect on the real quantity of money, making money neutral in the long run.

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