Within the aggregate demand-aggregate supply framework, monetarists argue that a change in aggregate
A) demand will have a large effect on the price level but a temporary effect on output.
B) demand will have a small effect on the price level but a permanent effect on output.
C) demand will have a large effect on the price level and a large effect on output.
D) supply will have a large effect on the price level but a temporary effect on output.

Question

Quizplus · Accepted Answer

Monetarists argue that changes in the money supply primarily affect aggregate demand, which in turn affects the price level in the short run but has little effect on real output in the long run. Therefore, a change in aggregate demand will have a large effect on the price level but only a temporary effect on output.

Within the Aggregate Demand-Aggregate Supply Framework, Monetarists Argue That a Change