Suppose the growth rate of the quantity of money increased from 5 per cent per year to 8 per cent per year. According to the ________, this event would trigger a business cycle expansion.
A)monetarist cycle model
B)Keynesian cycle model
C)aggregate supply cycle model
D)real business cycle model

Question

Quizplus · Accepted Answer

The monetarist cycle model suggests that changes in the money supply can lead to business cycle fluctuations. An increase in the growth rate of the money supply is likely to stimulate economic activity, leading to a business cycle expansion.

Suppose the Growth Rate of the Quantity of Money Increased