Asked Dec 1, 2019
Money neutrality is the proposition that changes in money have no real effect on the economy.
Selected Answer:







Expert Answer

Step 1

The phase ‘Neutrality of money’ was given in 1931 by an Austrian economist Friedrich A. Hayek.

Step 2

Money neutrality states that money is neutral. This means that money supply affects only nominal variables like price, exchange rate, and does not affect any real variables like rea...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Monetary Policy

Related Economics Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Explain in detail, how we define the employed, the unemployed, and who is in the labor force?

A: Employed are those people who belong to the labor force and are working belong to the employed categ...


Q: Refer to the table below and assume that the Fed's reserve ratio is 10 percent and the economy is in...

A: Given,Fed’s reserve ratio is 10% and economy is in a severe recession.From the table, at reserve rat...


Q: GDP is best defined as    a. the cost of producing all final goods and services sold during a give...

A: GDP is best defined as (b) the market value of all final goods and services produced during a given ...


Q: If people get higher pay from insurance than their premiums. Will this increase or decrease the deat...

A: Moral Hazard:Moral hazard is a situation, which arises when a person an insured person takes greater...


Q: Which of the following is an example of a company whose barrier to entry is owning all or almost all...

A: The barriers to entry are the restrictions that the economy has which prevents the entry of new firm...


Q: How does each of the following infrastructure items affect aggregate supply?  (a) highways, (b) scho...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...


Q: 7. Consider the following cost information for a pizzeria: Q (dozens) Variable Cost Total Cost $ 0 $...

A: The fixed costs are the costs that are incurred even if there is no production. These include the re...


Q: I need help with a-c

A: (a) Household’s budget constraint in period 1 is:C1 + S1p = Y1 – T1Household’s budget constraint in ...


Q: In 1929 the US had an unemployment rate of approximately 3.2%, or 1.6 million people unemployed, yet...

A: Full employment is an economic situation in which the most productive use is made of all available l...