Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

According to monetarist theory, if the money supply rises unexpectedly, what short-run impact will this have on money wages, real wages and the level of employment?

  • Amoney wages increase; real wages decrease; employment increase
  • Bmoney wages increase; real wages increase; employment decrease
  • Cmoney wages decrease; real wages increase; employment decrease
  • Dmoney wages decrease; real wages decrease; employment increase

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