Monetarists argue that the Federal Reserve System should
A. institute a prescribed rate of growth in the money supply.
B. self-correction is less effective than activist monetary policy.
C. policymakers should use monetary policy rather than fiscal policy to stabilize the economy.
D. since velocity is unstable, a fixed annual increase in the money supply will exacerbate inflation in the long run.

Question

05-07-2021
Business

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Monetarists argue that the Federal Reserve System should
A. institute a prescribed rate of growth in the money supply.
B. self-correction is less effective than activist monetary policy.
C. policymakers should use monetary policy rather than fiscal policy to stabilize the economy.
D. since velocity is unstable, a fixed annual increase in the money supply will exacerbate inflation in the long run.

Sagot :

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Baraq Baraq · Answer 1 · 2021-07-06T20:12:22-04:00

Answer:

C. policymakers should use monetary policy rather than fiscal policy to stabilize the economy.

Explanation:

Monetarists argue that the Federal Reserve System should "use monetary policy rather than fiscal policy to stabilize the economy."

According to monetarists, a monetary policy is a policy that involves the regulation or control of money supply, including the rate of interest such that it regulates the microeconomic of a nation. Hence, Monetarists argue that the Federal Reserve System should "use monetary policy rather than fiscal policy to stabilize the economy, " because it helps in the control of inflation, consumption, development, and cash flow.

Sagot :

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