With a monetary growth rule as proposed by the monetarists, during a recession the rate of growth of the money supply would
A)decrease at the same rate as the employment/population ratio.
B)increase at the same rate as the unemployment rate.
C)not change.
D)decrease at the same rate as real GDP.
E)increase at the same rate as inflation.

Question

Quizplus · Accepted Answer

According to the monetarists, a monetary growth rule involves a constant rate of growth in the money supply. Therefore, during a recession, the rate of growth of the money supply would not change.

With a Monetary Growth Rule as Proposed by the Monetarists