You and a friend are arguing over the issue of the nonneutrality of money.You believe that money is not neutral,and to prove your point you would cite all of the following except
A)large gold discoveries that increased the money supply preceded an economic boom.
B)a change in monetary institutions preceded a boom or recession.
C)a change in the leadership of the Fed and its policy was followed by noticeable changes in the money supply and a recession or inflation.
D)the fact that every recession was preceded by a drop in the money supply.

Question

Quizplus · Accepted Answer

D is incorrect because it actually supports the argument that money is not neutral. A drop in the money supply precedes recessions, indicating that money is not neutral and has an effect on the economy. A, B, and C are all correct and support the argument that money is not neutral.

You and a Friend Are Arguing Over the Issue of the Nonneutrality