Which of the following can a country increase in the long run by increasing its money growth rate?
A)the nominal wage divided by the price level
B)real output
C)real interest rates
D)None of the above is correct.

Question

Quizplus · Accepted Answer

Increasing the money growth rate in the long run will not increase real output or real interest rates, and will only lead to inflation and a decrease in the value of money. The nominal wage divided by the price level (i.e. real wage) may increase in the short run, but will eventually adjust back to its long-run equilibrium level.

Which of the Following Can a Country Increase in the Long