According to the Tenets of Monetary Theory, Which of the Following

question 53

Multiple Choice

According to the tenets of monetary theory, which of the following is a prescription for reducing inflation?

• A) If less money is available, price increases will slow and the inflationary spiral will end.
• B) Credit can be eased by lowering interest rates, thus allowing the supply of money to grow quickly.
• C) Increased federal spending will spur economic expansion, reduce unemployment, and increase personal spending.
• D) Reduced federal taxes will give consumers more buying power.