Monetarists believe in all of the following except
A)steady growth in inflation will yield stable output.
B)steady growth in the money supply will yield stable output.
C)fluctuations in the money supply are responsible for business cycles.
D)the Fed should not be involved in trying to stabilize the economy.

Question

Quizplus · Accepted Answer

Monetarists, such as Milton Friedman, argue that a steady growth in the money supply is crucial for stable output (B), believe that fluctuations in the money supply are a major cause of business cycles (C), and often argue that the Federal Reserve's attempts to stabilize the economy can be counterproductive (D). However, they do not typically argue that steady growth in inflation will yield stable output (A), as they focus more on the money supply than on inflation per se.

Monetarists Believe in All of the Following Except