Changes in a nation's money supply affect _____ in the short run but affect _____ in the long run.

Question

Quizplus · Accepted Answer

Changes in a nation's money supply can affect both the price level and the output level in the short run due to adjustments in spending, investment, and consumption. However, in the long run, the primary effect of changes in the money supply is on the price level, as output levels adjust to their long-term trend and are mainly influenced by factors such as technology, resources, and labor supply, rather than the money supply.

Changes in a Nation's Money Supply Affect _____ in the Short