Some economists have suggested that prices are sticky, or slow to adjust, in the short run. In
Question:
Some economists have suggested that prices are sticky, or slow to adjust, in the short run. In that case, any increase in money growth will first raise real GDP and nominal GDP but will not change prices. Over time, however, the increase in money growth will raise the inflation rate but not affect real GDP; thus, absent any other changes, real GDP will return to its initial level.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Money Banking And Financial Markets An Economic Approach
ISBN: 9780395643952
1st Edition
Authors: Michael R. Baye, Dennis Jansen
Question Posted: