Monetarists believe that an increase in the money supply will lead to:
A) both c and d.
B) all of the following.
C) an increase in the price level.
D) an increase in nominal GDP
E) an increase in real GDP.

Question

Quizplus · Accepted Answer

Monetarists believe that an increase in the money supply primarily leads to an increase in the price level (C) and nominal GDP (D), as they emphasize the long-term neutrality of money, meaning real GDP (E) is not affected in the long run.

Monetarists Believe That an Increase in the Money Supply Will