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Explain the logic of the monetary neutrality and why changes

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ECN 351 Topic 8 Discussions GCU

ECN 351 Topic 8 DQ 1

Explain the logic of the monetary neutrality and why changes in the quantity of money only affect nominal variables and not real variables. Do you agree that monetary neutrality approximates the behavior of the economy in the long run? Why or why not?

ECN 351 Topic 8 DQ 2

Why do governments sometimes pay for their spending by printing more money? Why do economists refer to this as an ‘inflation tax” that can result in very harmful results?

 

 

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