Proponents of monetary policy based on fixed rules base their position on the assumption of a vertical aggregate supply curve.

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Proponents of monetary policy based on fixed rules believe that the aggregate supply curve is vertical in the long run, meaning that changes in the money supply only affect prices but do not impact real output or employment. This assumption is based on the classical view of the economy, which emphasizes the importance of flexible prices and wages in achieving long-run equilibrium.

Proponents of Monetary Policy Based on Fixed Rules Base Their