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 an expansion; causes the economy to enter a recession
B)causes the economy to enter a recession; causes the economy to enter an expansion
C)decreases real GDP; decreases the inflation rate
D)increases real GDP; decreases the inflation rate

Question

Quizplus · Accepted Answer

In monetarist theory, a decrease in the money supply growth rate can lead to a recession, while an increase can stimulate an expansion.

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