Monetarists take the position that monetary policy
A) is limited by the crowding-out effect on investment.
B) is enhanced by the crowding-out effect on investment.
C) should be based on rules rather than discretion.
D) should be based on discretion rather than rules.

Question

Quizplus · Accepted Answer

Monetarists believe that monetary policy should be based on predictable rules rather than discretionary actions by central bankers. This allows for greater stability and transparency in the economy, which can help reduce inflation and promote sustained economic growth. Monetarists see the role of the central bank as primarily controlling the money supply and using interest rates to achieve long-term economic stability, rather than trying to fine-tune the economy through frequent policy changes.

Monetarists Take the Position That Monetary Policy