Absent regulation of the money supply, the money supply would likely reflect the business cycle.

Question

Quizplus · Accepted Answer

Without regulation, as the economy goes through expansionary phases, the demand for money increases, and so does the supply of money. As the economy goes through contractionary phases, the demand for money decreases, and so does the supply of money. This can create instability and exacerbate the business cycle.

Absent Regulation of the Money Supply, the Money Supply Would