Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

According to monetarist theory, what short-run effect will an unanticipated rise in the money supply have on output and on the price level?

  • Aeffect on output: increase; effect on the price level: increase
  • Beffect on output: increase; effect on the price level: no change
  • Ceffect on output: no change; effect on the price level: increase
  • Deffect on output: no change; effect on the price level: no change

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI