Economics · Macroeconomics
Money is neutral if changes in money stock lead to:
- 1no change in price level, output, interest rates and real balances.
- 2changes in price level and real interest rates, with output and real balances remaining unchanged.
- 3changes in price level and output, with interest rates and real balances remaining unchanged.
- 4changes in price level, while real output, interest rates and real balances remain unchanged.✓
Correct answer
changes in price level, while real output, interest rates and real balances remain unchanged.
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