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How Might Changes in the Money Supply Be Non-Neutral in the Short

Question 17

Multiple Choice

How might changes in the money supply be non-neutral in the short run?


A) As the amount of money circulating in the economy changes before prices respond,the purchases of consumers change accordingly,which leads producers to change production levels.
B) When money supply changes in the short run,it will affect nominal,but not real,variables in the short run.
C) As money growth increases at a faster rate,it will cause real GDP to grow at an even faster rate.
D) If producers expect inflation to increase,they will increase supply in order to sell before the arrival of inflation.

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