The monetary growth rule is a plan for increasing the quantity of money
A)at a fixed rate that does not respond to changes in the economic condition.
B)at a rate which increases as the economy grows.
C)at a rate which decreases as the economy declines.
D)at a rate which increases during recessions and decreases during expansions.

Question

Quizplus · Accepted Answer

The monetary growth rule, often associated with monetarism and economists like Milton Friedman, advocates for increasing the quantity of money at a fixed rate regardless of changes in the economic condition. This approach is intended to provide stability and predictability in the monetary policy, avoiding the potential for policy-induced economic fluctuations.

The Monetary Growth Rule Is a Plan for Increasing the Quantity