In the context of classical economics, an increase in money supply causes:
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UGC-NET 2025 Question 14: Classical macroeconomics
Answer and worked solution
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Classical macroeconomics has come up 35 times in 7 exams since 2008.
What this question tests
This question is on Classical dichotomy, money neutrality and the Pigou effect, part of Classical macroeconomics in Macroeconomics.
Why money affects only the price level in the classical model, and how falling prices could restore full employment.
TestStop has 14 past-paper questions on this subtopic.
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