According to the monetarists, deliberate government intervention:
A)will stabilize the economy if the money supply is increased during recessions and decreased during expansions.
B)will effectively reduce the unemployment rate below its natural rate.
C)will stabilize the economy if the money supply is reduced during recessions and increased during expansions.
D)will destabilize the economy only if the government uses fiscal policy to change equilibrium income.
E)will destabilize the economy and cause a business cycle of its own, regardless of whether fiscal or monetary policy is used.

Question

Quizplus · Accepted Answer

Monetarists believe that government intervention, particularly through monetary policy, can lead to economic instability and create its own business cycles, rather than stabilizing the economy.

According to the Monetarists, Deliberate Government Intervention