Which of the Following Is TRUE Regarding the Monetarist Theory

question 128

Multiple Choice

Which of the following is TRUE regarding the monetarist theory of the business cycle?
I. Monetarists assume that the quantity of money increases at a constant rate.
II. Fluctuations in interest rates cause business cycles.
III. Changes in the growth rate of the quantity of money affect aggregate demand.

• A) III only
• B) II and III
• C) I only
• D) I and II

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