According to Keynesians, the primary reason money is not neutral is
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1 mark, −0.33MacroeconomicsClassical macroeconomicsClassical dichotomy, money neutrality and the Pigou effectEasyabout 1 min
UoH 2018 Question 8: 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.
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