The principle of monetary neutrality implies that an increase in the money supply will increase

A) real GDP and the price level.
B) real GDP, but not the price level.
C) the price level, but not real GDP.
D) neither the price level nor real GDP.

Monetary Neutrality

The idea that changes in the money supply only affect nominal variables (like prices) in the long run and have no effect on real variables (like output or employment).

Money Supply

The combined total of all monetary resources in an economy at a designated time, including cash, coins, and balances in checking and savings accounts.