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Classical Economist David Hume Observed That as the Money Supply

Question 4

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Classical economist David Hume observed that as the money supply expanded after gold discoveries it took some time for prices to rise and in the meantime the economy enjoyed higher employment and production.This is inconsistent with monetary neutrality because


A) monetary neutrality would mean that neither prices nor production should have risen.
B) monetary neutrality would mean that production should have risen,but prices should not have.
C) monetary neutrality would mean the prices should have risen,but production should not have changed.
D) monetary neutrality would mean that prices and production should both have fallen.

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