_____________ believe that when the money supply exceeds the amount of money demanded, the public will spend more rapidly, causing real economic activity or prices to rise.They also believe that a too-rapid rate of growth in the money supply will ultimately result in rising prices or inflation because excess money will be used to bid up the prices of existing goods.
A)Monetarists
B)Keynesians
C)Neo Classicalists
D)none of the above

Question

Quizplus · Accepted Answer

Monetarists believe that changes in the money supply have a direct impact on inflation and economic activity. They argue that too much growth in the money supply will lead to higher prices, while too little growth in the money supply will lead to economic stagnation. This theory is based on the quantity theory of money, which suggests that the price level is directly proportional to the supply of money in the economy. Keynesians, on the other hand, argue that other factors such as government spending and consumer sentiment can have a greater impact on economic activity and inflation than changes in the money supply. Neo classicalists have a different perspective of economic theory and not particularly related to monetary policy.

_____________ Believe That When the Money Supply Exceeds the Amount