According to the monetarists, which of the following is true?
A) Instability in the money supply is the primary cause of economic instability.
B) A reduction in the money supply will cause consumers to increase spending.
C) A reduction in the money supply will cause a proportional reduction in wages and prices, leaving output unchanged.
D) A rapid growth rate of the money supply will lead to a rapid growth rate of real GDP.

Question

Quizplus · Accepted Answer

According to monetarists, instability in the money supply is the primary cause of economic instability. They believe that changes in the money supply have a direct impact on interest rates, inflation rates, and overall economic activity. Therefore, monetarists advocate for a stable and predictable growth rate in the money supply to maintain economic stability.

According to the Monetarists, Which of the Following Is True