Monetarism is a school of thought put forth by Milton Friedman.He argued that the economy would ordinarily
A)be below potential GDP.
B)be at potential GDP.
C)be unstable.
D)be above potential GDP.

Question

Quizplus · Accepted Answer

Milton Friedman argued that monetary policy could help the economy reach its potential GDP, which is the level of output that can be sustained without causing inflation. Therefore, according to monetarism, the economy would usually be at potential GDP if monetary policy was conducted appropriately.

Monetarism Is a School of Thought Put Forth by Milton