According to the long-run monetary model of the price level:
A) the demand for money is always proportional to the supply of money.
B) when the demand for money decreases, prices respond very slowly.
C) as long as prices are flexible, a change in the supply of money or the demand for money will result in a change in the price level to restore equilibrium.
D) equilibrium conditions require a change in real GDP to lower inflation.
Correct Answer:
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