'Monetarism' is a school of thought put forth by Milton Friedman in the 1940s. He argued that the economy would most likely be:
A)below potential GDP.
B)at potential GDP.
C)unstable.
D)above potential GDP.

Question

Quizplus · Accepted Answer

Friedman believed that if the monetary policy was stable and predictable, the economy would operate at its potential GDP in the long run. Therefore, option B is the correct answer.

'Monetarism' Is a School of Thought Put Forth by Milton