Most of the pressure for a monetary growth rule has disappeared because since 1980,
A)the relationship between movements in the money supply and movements in real GDP and the price level have become much stronger.
B)the relationship between movements in the money supply and movements in real GDP and the price level have become much weaker.
C)the relationship between movements in interest rates and movements in real GDP and the price level have become much stronger.
D)the relationship between movements in interest rates and movements in real GDP and the price level have become much weaker.
E)the relationship between money supply and the state of the labour market has become stronger than at any point since the 1930s.

Question

Quizplus · Accepted Answer

The weakening of the relationship between movements in the money supply and movements in real GDP and the price level means that a monetary growth rule would be less effective in achieving its intended goals. Therefore, the pressure for such a rule has decreased.

Most of the Pressure for a Monetary Growth Rule Has