Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increasesa. the inflation rate and nominal interest rates.b. the inflation rate, but not nominal interest rates.c. nominal interest rates, but not the inflation rate.d. neither the inflation rate nor nominal interest rates.

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16-12-2022
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Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increasesa. the inflation rate and nominal interest rates.b. the inflation rate, but not nominal interest rates.c. nominal interest rates, but not the inflation rate.d. neither the inflation rate nor nominal interest rates.

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pragyavermav1 pragyavermav1 · Answer 1 · 2022-12-24T11:06:27+01:00

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases is a. the inflation rate and nominal interest rates.

Many economists preserve that monetary neutrality is a good approximation for the way the economic system behaves over long intervals of time however that in the brief run economic-disequilibrium idea applies, such that the nominal money supply could have an effect on output.

Monetary neutrality is the concept that says that modifications in cash deliver have no real results in the economic system. the classical model of the rate degree. says that the actual quantity of money is usually at its lengthy-run equilibrium level.

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