Multiple Choice
According to the monetarist theory
A) an increase in the money supply will affect output and the price level in the long run.
B) a decrease in the money supply will increase interest rates as portfolios rebalance, leading to a drop in investment and/or consumption spending.
C) the velocity of money is highly unstable.
D) an increase in the money supply will affect only output in the long run.
Correct Answer:
Verified
Correct Answer:
Verified
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