Economics · Classical Economics
Which of the following statements is INCORRECT according to classical macroeconomic theory?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Money is neutral in the long run.
- 2Money supply affects real variables such as output and employment.✓
- 3Real variables are determined independently of the nominal money supply.
- 4The theoretical separation of real and nominal variables is called the classical dichotomy.
Correct answer
Money supply affects real variables such as output and employment.
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