According to monetarists,such as Milton Friedman ________.
A)the central bank should have discretionary authority to respond to economic problems that develop over the course of the business cycle
B)the Taylor rule should effectively address the problem of inflation
C)an increase in government spending has substantially the same effects as an unanticipated increase in the money supply on domestic interest rates
D)the money supply should grow at a constant rate regardless of the state of the economy

Question

Quizplus · Accepted Answer

Monetarists such as Milton Friedman believe that the money supply should grow at a constant rate regardless of the state of the economy. They argue that fluctuations in the money supply only lead to inflation and distortions in the economy, and that a constant rate of growth would lead to steady and predictable economic growth. Therefore, choice D is the best answer.

According to Monetarists,such as Milton Friedman ________