Milton Friedman's argument was that the Fed should follow a monetary policy rule so that the money supply would:
A) grow at a slow and steady rate.
B) remain constant.
C) grow proportionally with the price level.
D) grow at the same rate as the GDP growth rate.

Question

Quizplus · Accepted Answer

Milton Friedman believed that the money supply should grow at a slow and steady rate in order to maintain a stable and predictable economy. This is because sudden changes in the money supply can lead to inflation or deflation, which can have negative effects on economic growth and stability. By following a monetary policy rule that aims for a consistent growth rate in the money supply, the Fed can help ensure steady economic growth and stability.

Milton Friedman's Argument Was That the Fed Should Follow a Monetary