Question

Suppose that monetary neutrality and the fisher effect both hold. other things the same, the quantity theory would predict that an increase in money supply growth would result in question 19 options:
a. both higher inflation and higher nominal interest rates.
b. higher inflation, but not higher nominal interest rates.
c. higher nominal interest rate, but not higher inflation.
d. neither higher inflation nor higher nominal interest rate.

Answer 1

A is the answer!
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