Which of the following best describes the classical and the Keynesian views on the monetary neutrality? Classical economists believe in slow adjustment of prices, but Keynesians argue that price adjustment does not take long. Keynesians believe that money affects employment and output in both short-run and long- run, but classical economists argue that money is neutral in both short-run and long-run. Both classical and Keynesian economists believe in monetary neutrality in the long-run, but they disagree in the speed of price adjustment. Classical economists believe that money is neutral, but Keynesians do not.

Which of the following best describes the classical and the Keynesian views on the monetary neutrality? Classical economists believe in slow adjustment of prices, but Keynesians argue that price adjustment does not take long. Keynesians believe that money affects employment and output in both short-run and long- run, but classical economists argue that money is neutral in both short-run and long-run. Both classical and Keynesian economists believe in monetary neutrality in the long-run, but they disagree in the speed of price adjustment. Classical economists believe that money is neutral, but Keynesians do not.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter16: Monetary Policy

Section: Chapter Questions

Problem 19SQ

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