Question: A supply shock such as the exogenous increase in the price of oil would have no effect on real or nominal income within Friedman's model.

"A supply shock such as the exogenous increase in the price of oil would have no effect on real or nominal income within Friedman's model. This follows because such a supply shock would not affect the quantity of money, which is the dominant factor determining nominal income and, in the short run, real income." Do you agree or disagree with this statement? Explain.

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