Adherents of the traditional monetary rule advocate that the
A)functional finance approach to fiscal policy be adopted.
B)money supply should be increased by a constant rate year after year.
C)money supply should be reduced during inflation and increased during recession.
D)money supply should be increased during inflation and reduced during recession.

Question

Quizplus · Accepted Answer

Adherents of the traditional monetary rule, like those who support Milton Friedman's k-percent rule, believe that the money supply should be increased by a constant rate each year, regardless of economic conditions, to ensure stable economic growth and control inflation.

Adherents of the Traditional Monetary Rule Advocate That the