The Friedman Rule for Optimal Money Growth Is That

question 14

Multiple Choice

The Friedman rule for optimal money growth is that

• A) inflation and aggregate output grow at the same rate.
• B) the money supply and aggregate output grow at the same rate.
• C) the real wage rate and aggregate output grow at the same rate.
• D) money should grow at a rate that implies that the nominal interest rate is zero.
• E) money should grow at a rate that implies that the real interest rate is zero.

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Definitions:

Fractions

Mathematical expressions representing the division of one quantity by another, indicating parts of a whole.

Denominators

The bottom number in a fraction, representing the total number of parts the whole is divided into.

Numerator

The top number of a fraction.

Denominator

The bottom number of a fraction.