Which of the following are TRUE regarding Milton Friedman's k-percent money targeting rule?
i.Currently this policy is used by many policy makers.
ii.This rule sets the growth rate of the quantity of money independently of the economy's behaviour.
iii.For this policy to work well,the velocity of circulation must be stable.

Question

Quizplus · Accepted Answer

Option i is false because currently, very few policymakers use k-percent money targeting rule. Option ii is true; it states that k-percent money targeting rule sets the growth rate of the quantity of money independently of the economy's behavior. Option iii is also true because for this policy to work well, the velocity of circulation must be stable. Therefore, both options ii and iii are correct, making option E the correct answer.

Which of the Following Are TRUE Regarding Milton Friedman's K-Percent