In the long run,money:
A) always increases real GDP.
B) will not affect prices.
C) will lift the standard of living for everyone in a nation.
D) is neutral with respect to quantity produced.

Question

Quizplus · Accepted Answer

Money is neutral with respect to quantity produced in the long run. This is because an increase in the money supply will lead to an increase in prices proportional to the increase in the money supply, leaving the quantity produced unaffected. In the long run, the increase in prices will lead to an increase in the cost of production, resulting in a decrease in the quantity produced. Therefore, while money may have short-term effects on production, it is ultimately neutral in the long run.

In the Long Run,money