According to classical macroeconomic theory, which of the following does money growth influence in the long run?
A)both real and nominal variables
B)the unemployment rate
C)factors that affect unemployment
D)only nominal variables

Question

Quizplus · Accepted Answer

According to classical macroeconomic theory, money growth influences only nominal variables in the long run. Real variables such as output and employment are determined by factors such as technology and factor endowments. However, in the short run, changes in the money supply can affect real variables through changes in aggregate demand.

According to Classical Macroeconomic Theory, Which of the Following Does