which of the following is accurate? monetary policy is neutral in both the short run and the long run…

which of the following is accurate? monetary policy is neutral in both the short run and the long run. though monetary policy is neutral in the long run, it may have effects on real variables in the short run. monetary policy has profound effects on real variables in both the short run and the long run. monetary policy has profound effects on real variables in the long run, but is neutral in the short run.

which of the following is accurate? monetary policy is neutral in both the short run and the long run. though monetary policy is neutral in the long run, it may have effects on real variables in the short run. monetary policy has profound effects on real variables in both the short run and the long run. monetary policy has profound effects on real variables in the long run, but is neutral in the short run.

Answer

Brief Explanations:

According to economic theory, in the long - run, money is neutral and changes in the money supply only affect nominal variables. In the short - run, however, changes in monetary policy can impact real variables such as output and employment due to price and wage rigidities.

Answer:

B. Though monetary policy is neutral in the long run, it may have effects on real variables in the short run.