One of the main insights of monetarism is that:
A) the government can effectively manage aggregate demand by using its spending and taxing powers.
B) inflation can continue indefinitely without the cooperation of the central bank.
C) sustained inflation is a monetary phenomenon.
D) velocity is unstable and subject to wide fluctuations.

Question

Quizplus · Accepted Answer

Monetarism posits that inflation is primarily caused by an increase in the money supply. Therefore, sustained inflation is seen as a monetary phenomenon, rather than being driven by other factors such as supply shocks or changes in aggregate demand.

One of the Main Insights of Monetarism Is That