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If money is neutral, 1. an increase in the money supply does nothing. 2. a change in the money supply only affects nominal variables such

If money is neutral,

  1. 1. an increase in the money supply does nothing.2.a change in the money supply only affects nominal variables such as prices and wages.3. a change in the money supply only affects real variables such as real output.4.a change in the money supply reduces velocity proportionately; therefore there is no effect on either prices or real output.

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