The idea that a change in the money supply would affect prices but not real GDP is associated with the:
A) monetary equivalence theory.
B) law of unintended consequences.
C) classical monetary transmission mechanism.
D) GDP impossibility rule.

Question

Quizplus · Accepted Answer

The classical monetary transmission mechanism suggests that changes in the money supply affect nominal variables like prices but not real variables like real GDP, due to the neutrality of money in the long run.

The Idea That a Change in the Money Supply Would