In the New Classical View, If the Chairman of the Fed

Multiple Choice

In the new classical view, if the Chairman of the Fed announces a 10% increase in the money supply and then takes actions that cause the money supply to grow by 10%, the result will be

A) a 10% increase in the price level and no change in output.
B) a 10% increase in the price level and a small increase in output.
C) a less than 10% increase in the price level and a small increase in output.
D) a less than 10% increase in the price level and no change in output.