The long-run neutrality of money refers to the fact that in the long run,monetary policy
A)changes only real output.
B)changes only the real interest rate.
C)changes both real output and the real interest rate.
D)has no effect on either real output or the real interest rate.

Question

Quizplus · Accepted Answer

In the long run, the economy adjusts to changes in the money supply by adjusting prices and wages so that there is no net effect on real output or the real interest rate. This is known as the long-run neutrality of money.

The Long-Run Neutrality of Money Refers to the Fact That