For monetarists the main cause of economic fluctuations is changes in
A) investment.
B) consumption expenditure.
C) the growth rate of the quantity of money.
D) the levels of household debt.

Question

Quizplus · Accepted Answer

Monetarists emphasize the importance of the quantity of money in the economy and believe that changes in its growth rate are the primary cause of economic fluctuations. They argue that when the money supply expands rapidly, people are able to spend more, leading to increased demand for goods and services, and potentially causing inflation. Conversely, if the money supply contracts, people can afford to purchase fewer goods and services, leading to a decline in output and employment.

For Monetarists the Main Cause of Economic Fluctuations Is Changes