Monetarists believe that in the short run, a change in the money supply can affect _____, while in the long run, a change in the money supply will affect _____.
A) output and the price level; output only
B) output only; the price level only
C) output and the price level; the price level only
D) the price level only; output only

Question

Quizplus · Accepted Answer

Monetarists argue that in the short run, changes in the money supply can influence both output and the price level. However, in the long run, they believe that changes in the money supply only affect the price level, not output, due to the economy's return to its natural level of output.

Monetarists Believe That in the Short Run, a Change in the Money