Adherents of the traditional monetary rule say that the supply of money should be
A) increased at a constant rate each year.
B) decreased during recession and increased during inﬂation.
C) held constant over time.
D) increased during recession and decreased during inﬂation.

Question

Quizplus · Accepted Answer

Adherents of the traditional monetary rule, most notably associated with economist Milton Friedman, argue that the supply of money should be increased at a constant rate each year. This approach is based on the belief that predictable increases in the money supply can help stabilize the economy by avoiding the pitfalls of discretionary monetary policy, such as timing errors and political influences.

Adherents of the Traditional Monetary Rule Say That the Supply