In their analysis, monetarists rely heavily on:
A) the aggregate supply and aggregate demand model.
B) business cycle fluctuations.
C) the effects of changing interest rates
D) the equation of exchange.

Question

Quizplus · Accepted Answer

Monetarists, such as Milton Friedman, emphasize the role of governments in controlling the amount of money in circulation. They heavily rely on the equation of exchange (MV = PQ), which links the money supply (M), the velocity of money (V), the price level (P), and the output (Q), to analyze the economy and inflation.

In Their Analysis, Monetarists Rely Heavily On