The observation that the money supply is procyclical and leading the level of aggregate economic theory is most closely associated with
A) Lucas and Friedman.
B) Friedman and Schwartz.
C) Kydland and Prescott.
D) David Runkle.

Question

Quizplus · Accepted Answer

The observation that the money supply is procyclical and leading the level of aggregate economic theory is famously associated with Milton Friedman and Anna Schwartz's research on the Great Depression. They demonstrated that the Federal Reserve's contraction of the money supply in the early 1930s was a major contributing factor to the severity and duration of the Depression.

The Observation That the Money Supply Is Procyclical and Leading