Nobel Prize-winner Milton Friedman advocated which of the following as an adequate monetary policy?
A) a discretionary rule in which the money supply should be adjusted to control the level of inflation rate
B) a discretionary rule in which the money supply should be adjusted to counteract aggregate demand shocks
C) a strict rule in which the money supply should grow 2% higher than the long-run economic growth rate
D) a strict rule in which the money supply should grow at the rate of the long-run economic growth rate

Question

Quizplus · Accepted Answer

Milton Friedman was a strong advocate for a monetary policy rule that suggested the money supply should grow at a constant rate, closely aligned with the long-run economic growth rate. He believed this approach would provide stability and predictability, helping to avoid the boom-and-bust cycles associated with more discretionary monetary policies.

Nobel Prize-Winner Milton Friedman Advocated Which of the Following as an Adequate