Money is neutral in _____ since it cannot alter _____.

Question

Quizplus · Accepted Answer

In the long run, the economy returns to its natural level of real aggregate output, which is determined by factors such as technology, resources, and institutions. Money is neutral in the long run since it cannot alter the natural level of output. In the short run, however, changes in the money supply can affect prices and output. Therefore, options A and D are incorrect. Option B is incorrect since money can affect price levels in both the short and long run, but it cannot alter real aggregate output in the long run.

Money Is Neutral in _____ Since It Cannot Alter _____

Money Is Neutral in _ Since It Cannot Alter _