A Monetarist-oriented econometric model is likely to emphasize that monetary policy affects economic activity
A) directly through changes in government spending.
B) directly through changes in the money supply.
C) indirectly through changes in velocity.
D) indirectly through changes in money demand.

Question

Quizplus · Accepted Answer

Monetarist-oriented econometric models highlight the direct relationship between monetary policy and economic activity as changes in the money supply affect aggregate demand and, subsequently, economic activity. Options A, C, and D do not correctly reflect the primary emphasis of monetarist-oriented models.

A Monetarist-Oriented Econometric Model Is Likely to Emphasize That Monetary