In the long run,an increase in the money supply will cause real GDP to:
A) increase.
B) decrease.
C) remain constant.
D) deflate.

Question

Quizplus · Accepted Answer

In the long run, an increase in the money supply is typically neutral with respect to real GDP, meaning it does not affect the real output of the economy, but rather affects the price level (inflation). Real GDP is determined by factors such as technology, resources, and labor, not the amount of money in circulation.

In the Long Run,an Increase in the Money Supply Will