Which of the following statements would Milton Friedman agree with concerning the conduct of monetary policy?
A)Information lags are short, enabling the central bank to respond quickly to changes in the economy.
B)There is little uncertainty over the effect of a change in the money supply on the economy.
C)There are long and variable lags between monetary policy actions and their economic results.
D)Wage and price adjustments are relatively slow, so changing the money supply will have a minimal impact on the real economy.

Question

Quizplus · Accepted Answer

Milton Friedman was a proponent of the monetarist school of thought, which argues that the primary role of monetary policy is to control the growth of the money supply to achieve stable economic growth. One of the key premises of monetarism is that there are long and variable lags between changes in the money supply and their economic effects. Therefore, Friedman would agree with statement C that there are long and variable lags between monetary policy actions and their economic results.

Which of the Following Statements Would Milton Friedman Agree with Concerning