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)the price level

Question

Quizplus · Accepted Answer

Increasing the money growth rate in the long run leads to an increase in the price level. This is because the quantity theory of money suggests that there is a direct relationship between the money supply and the price level. Therefore, an increase in the money growth rate will lead to an increase in the price level in the long run.

Which of the Following Can a Country Increase in the Long