In ________, monetary policy can change the level of output.
A) the long run only
B) both the short run and the long run
C) neither the short run nor the long run
D) the short run only

Question

Quizplus · Accepted Answer

In the short run, monetary policy can influence the level of output by affecting demand through interest rates and liquidity. In the long run, its effects are neutral on output, influencing mainly the price level.

In ________, Monetary Policy Can Change the Level of Output