Classical economist David Hume observed that as the money supply expanded after gold discoveries it took some time for prices to rise and in the meantime the economy enjoyed higher employment and production. This is inconsistent with monetary neutrality because monetary neutrality would mean that
A) neither prices nor production should have risen.
B) production should have risen, but prices should not have.
C) the prices should have risen, but production should not have changed.
D) the prices and production should both have fallen.
Correct Answer:
Verified
Q123: The effect of an increase in the
Q124: In 2009, Congress passed legislation providing states
Q125: Aggregate demand includes
A)the quantity of goods and
Q126: "Money is a veil" best describes
A)the general
Q127: From 2001 to 2005 there was a
Q129: The initial impact of an increase in
Q130: Investment is
A)a small part of real GDP,
Q131: In 2008, the United States was in
Q132: Keynes thought that the behavior of the
Q133: Other things the same, if the U.S.
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents