If money is neutral and velocity is stable, an increase in the money supply creates a proportional increase in a. real output only. b. nominal output only. c. the price level only. d. both the price level and nominal output.hh
"D"
both the nominal output and the price level of the goods will increase in that case, taking the quantity of money into account MV=PT, As V is constant an increase in the money supply will increase the nominal output and price.
If money is neutral and velocity is stable, an increase in the money supply creates a...