The Monetarists advocate the monetary rule in order to stabilize the business cycle which states that the money supply should be increased by a constant rate year after year.

Question

Quizplus · Accepted Answer

This is a correct statement about the Monetarist school of thought. They believe that a steady, predictable increase in the money supply can help stabilize economic activity and avoid the ups and downs of the business cycle that can be caused by fluctuations in the money supply.

The Monetarists Advocate the Monetary Rule in Order to Stabilize