Asked by Talyn Rhodes on Jul 20, 2024
Verified
Money neutrality states that a change in the money supply affects _____ variables only. Most economists believe that money neutrality is a good description of how money affects the economy in the _____.
Money Neutrality
An economic theory which postulates that changes in the money supply only affect nominal variables and have no influence on real variables such as output or employment in the long run.
Money Supply
The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts, often controlled by a nation's central bank.
Real Variables
Economic variables that have been adjusted for inflation, representing true purchasing power or economic status.
- Acquire knowledge on the theory of money neutrality and its importance for economic factors in the long term.
Verified Answer
Learning Objectives
- Acquire knowledge on the theory of money neutrality and its importance for economic factors in the long term.
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