Which of the following is true ?
A) Keynesians advocate decreasing the money supply during economic recessions but increasing the money supply during economic expansions.
B) Monetarists advocate increasing the money supply by a constant rate year after year.
C) Keynesians argue that the crowding-out effect is rather large.
D) Monetarists argue that the crowding-out effect is rather insignificant.

Question

Quizplus · Accepted Answer

Monetarists advocate increasing the money supply by a constant rate year after year. This is known as the monetarist rule and is based on the quantity theory of money, which states that changes in the money supply have a proportional effect on changes in aggregate price levels. Keynesians, on the other hand, argue for more flexible monetary policy, advocating for increasing the money supply during economic recessions and decreasing it during economic expansions. Both Keynesians and Monetarists have differing views on the crowding-out effect, with Keynesians arguing that it is rather large and Monetarists arguing that it is rather insignificant.

Which of the Following Is True