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

Question

Quizplus · Accepted Answer

The Monetarists do advocate for a monetary rule to stabilize the business cycle, but they advocate for a constant growth rate of the money supply, not a constant decrease. This is known as the "constant growth rate of money hypothesis."

The Monetarists Advocate the Monetary Rule in Order to Stabilize