Monetary Policy - Money output, and Prices in the long run - Money neutrality
7 important questions on Monetary Policy - Money output, and Prices in the long run - Money neutrality
What do we call it when changes in the money supply have no real effects on the economy?
What doe the left had side M*V show
What happens when the central bank increases the level of money supply? Assuming velocity constant?
the nominal GDP will rise.
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What difference does a change in money supply make in nominal terms, and real terms
How is the quantity equation given?
M= the level of the nominal money supply
V= velocity of money (the average number of times a dollar is spent per period)
P= aggregate price level
Y= aggregate real output (real income)
What does the right hand side P*Y mean?
Will the real GDP increase in the long run when the money supply increases? What are the only factors that shift real GDP?
stocks of productive inputs
physical and human capital and labor
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