According to the monetarist view,the aggregate supply curve is:
A) Upward sloping to the right.
B) Perfectly vertical at the natural rate of unemployment.
C) Flat or horizontal until full employment is reached.
D) Flat or horizontal at all levels of output.

Question

Quizplus · Accepted Answer

According to the monetarist view, the aggregate supply curve is perfectly vertical at the natural rate of unemployment because they believe that in the long run, changes in the money supply only affect prices and not output. Therefore, the only way to increase output is to increase factors of production, which is not affected by changes in the money supply.

According to the Monetarist View,the Aggregate Supply Curve Is