The constant growth rate rule for money,as initially proposed by Milton Friedman,has been adjusted ________.
A)to take the problem of moral hazard in account
B)to account for the role played by adaptive expectations in policy formation
C)for the difference between real and nominal economic variables
D)to allow for possible short-run movements in velocity

Question

Quizplus · Accepted Answer

The constant growth rate rule for money proposed by Milton Friedman has been adjusted to allow for possible short-run movements in velocity. This adjustment takes into account deviations from the long-run relationship between money supply and money demand which can cause temporary fluctuations in velocity.

The Constant Growth Rate Rule for Money,as Initially Proposed by Milton