To reduce the level of unanticipated inflation,monetarists advocate
A)A sharp increase in short-term interest rates.
B)Steady and predictable changes in the money supply.
C)A decrease in short-term interest rates.
D)A decrease in government spending.

Question

Quizplus · Accepted Answer

Monetarists believe that steady and predictable changes in the money supply are the most effective way to control inflation. This involves targeting a specific growth rate for the money supply that is consistent with the long-term growth of the economy. By keeping the growth of the money supply in check, they believe that inflation can be kept under control. Additionally, Monetarists also believe that the government should limit its involvement in the economy and let market forces determine the allocation of resources.

To Reduce the Level of Unanticipated Inflation,monetarists Advocate