Multiple Choice
Which statement best characterizes the effects of monetary policy?
A) Monetary policy is neutral in both the short run and the long run; therefore, it does not affect real variables.
B) Monetary policy is neutral in the long run, but 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.
Correct Answer:
Verified
Correct Answer:
Verified
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