Advocates of nondiscretionary policy contend that a policy of shifting the aggregate demand curve will be costly because it produces more volatility in both the price level and output.Thus they favor
A)a policy of variable money supply growth.
B)supply-side policy.
C)demand-management policy.
D)a constant-money-growth-rate rule.

Question

Quizplus · Accepted Answer

Advocates of nondiscretionary policy prefer a constant-money-growth-rate rule because it provides stability and predictability in the economy, reducing the likelihood of volatility in both output and price level. This policy ensures that money supply growth remains steady and predictable, making it easier for households and businesses to make long-term financial decisions.

Advocates of Nondiscretionary Policy Contend That a Policy of Shifting