Real and nominal variables are highly intertwined, and changes in the money supply change real GDP in the short run.
举一反三
- Which of the following is accurate? A: Monetary policy is neutral in both the short run and the long run. B: Though monetary policy is neutral in the long run, it may have effects on real variables in the short run. C: Monetary policy has profound effects on real variables in both the short run and the long run. D: Monetary policy has profound effects on real variables in the long run, but is neutral in the short run.
- In the short run, the impact of an increase in the money supply on the price level and real output will be: Price level Real output（） ①A. Increase Increase ②B. Increase No change ③C. No change Increase A: ① B: ② C: ③
- According to the assumptions of the quantity theory of money, if the money supply decreases by 7 percent, then A: nominal and real GDP would fall by 7 percent. B: nominal GDP would fall by 7 percent; real GDP would be unchanged. C: nominal GDP would be unchanged; real GDP would fall by 7 percent. D: neither nominal GDP nor real GDP would change.
- When the economy is operating at potential GDP, an unannounced decrease in the rate of growth of the money supply intended to reduce inflation will most likely lead to. lower inflation and: A: a decrease in output in both the short run and the long run. B: no change in output in both the short run and the long run. C: a decrease in output in the short run, and lower inflation but no change in output in the long run.
- If money is neutral, then changes in the quantity of money A: do not affect real output. B: affect both nominal and real output. C: do not affect nominal output. D: affect neither nominal nor real output.