Friedman favored:
A) activist monetary policy to stabilize the economy.
B) activist fiscal policy coupled with a neutral monetary policy.
C) a monetary policy rule.
D) interest rate targeting.

Question

Quizplus · Accepted Answer

Friedman favored a monetary policy rule which would provide a clear and transparent framework for influencing the economy rather than discretionary policy. He believed that a rule-based system could help stabilize the economy by providing predictability and avoiding policy mistakes. He did not favor interest rate targeting because he believed that it was too narrow a focus for monetary policy.

Friedman Favored