The main idea behind monetarism is that:
A) the aggregate output will be even greater than potential output if the money supply grows at a constant rate.
B) the aggregate price level will increase proportionally if the money supply grows at a constant rate.
C) the government budget will have a deficit if the government spending grows at a constant rate.
D) the aggregate output will grow steadily at a constant rate if the money supply also grows at a constant rate.

Question

Quizplus · Accepted Answer

Monetarism posits that controlling the money supply is key to managing economic stability, suggesting that a steady growth in money supply leads to steady economic growth.

The Main Idea Behind Monetarism Is That