Question $5($Total $20$ marks$)$

Part A: "Neutrality of Money" is one of the major propositions of the classical school of economics.

a$.(3$ marks$)$ Explain what "neutrality of money" specifically means.

b$.(3$ marks$)$ Explain, using the quantity equation of money, why "the prices rise when the government prints too much money.

c$.(2$ marks$)$ In the central bank aims to keep the price level unchanged, does it mean by "neutrality of money" that the central bank should keep the money supply unchanged? Explain.

d$.(2$ marks$)$ If the central bank aims to keep inflation at a constant rate per annum, does it mean by "neutrality of money" that the central bank should increase by money supply at a constant rate?