If the Friedman rule for long-term monetary policy were implemented,the result would be

Question

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The Friedman rule suggests setting nominal interest rates at zero to achieve a small but positive inflation rate that would facilitate price stability and long-term economic growth. However, some economists argue that implementing the Friedman rule could lead to deflation in the short run, as it would reduce aggregate demand and output. Therefore, the best choice is C) deflation.

If the Friedman Rule for Long-Term Monetary Policy Were Implemented,the