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Because Monetarists Believe That Output Is Sensitive to Changes in the Money

Question 144

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Because monetarists believe that output is sensitive to changes in the money supply,they recommend that the money supply be allowed to grow at a steady and predictable rate.
Steady growth of the money supply reduces uncertainty and allows for steady economic growth,ensuring that the growth in money demand is accompanied by an increasing money supply to finance an increasing number of transactions.

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