Refer to the information provided in Figure 17.2 below to answer the questions that follow. Figure 17.2
-Refer to Figure 17.2. According to ________, a(n) ________ fiscal policy in the long run and after all the adjustments have been made increases price level above P₁, but does not change equilibrium output.

Question

Refer to the information provided in Figure 17.2 below to answer the questions that follow.

Figure 17.2
-Refer to Figure 17.2. According to ________, a(n) ________ fiscal policy in the long run and after all the adjustments have been made increases price level above P₁, but does not change equilibrium output.

Quizplus · Accepted Answer

Monetarists argue that an expansionary fiscal policy will ultimately lead to an increase in the price level without affecting the long-term equilibrium output, due to the long-term neutrality of money.

Refer to the Information Provided in Figure 17