The View That Excessive Growth of the Money Supply Over

question 168

Multiple Choice

The view that excessive growth of the money supply over long periods leads to inflation

• A)is accepted by the monetarists but not by mainstream macroeconomists.
• B)is the main contribution of the rational expectations theory.
• C)had been absorbed into the mainstream of macroeconomics.
• D)is known as the monetary rule.

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Definitions:

Account Earning

The income generated from an investment or the revenue accrued from a bank account over a specific period.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value.

Savings Bond

Government-issued bonds that are designed for individual investors and offer a fixed interest rate over a fixed period of time.

Matures

Refers to the point in time when a financial instrument, like a bond or loan, reaches its due date and the principal amount must be repaid.