In the Keynesian model,money is
A)neutral in both the short run and the long run.
B)neutral in neither the short run nor the long run.
C)neutral in the short run, but not in the long run.
D)neutral in the long run, but not in the short run.

Question

Quizplus · Accepted Answer

In the Keynesian model, money is considered neutral in the long run but not in the short run. This means that changes in the money supply can affect real variables like output and employment in the short run, but in the long run, prices adjust to changes in the money supply, leaving real variables unaffected.

In the Keynesian Model,money Is