In monetarist business cycle theory, decreasing the growth rate of the quantity of money and increasing the growth rate of the quantity of money .
A) causes the economy to enter a recession; causes the economy to enter an expansion
B) increases real GDP; decreases the inflation rate
C) causes the economy to enter an expansion; causes the economy to enter a recession
D) decreases real GDP; decreases the inflation rate

Question

Quizplus · Accepted Answer

In monetarist theory, decreasing the growth rate of money supply can lead to a recession due to reduced spending, while increasing it can lead to an expansion by boosting spending and investment.

In Monetarist Business Cycle Theory, Decreasing the Growth Rate of the Quantity