Monetarists Reject Using Discretionary Monetary Policy as an Effective Stabilization

question 73

Multiple Choice

Monetarists reject using discretionary monetary policy as an effective stabilization tool because they believe:

• A) if the money supply grows at a rate equal to the economy's long-run rate of economic growth, then the economy will be unstable.
• B) that changes in the money stock do not affect output or prices.
• C) the Fed will miss its money supply targets and make the economy worse.
• D) monetary policy can stimulate aggregate demand, but it cannot affect inflation.

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Definitions:

Corporate Veil

A legal concept that separates the identity of a corporation from its shareholders, protecting them from being personally liable for the company's debts or legal obligations.

De Facto Corporation

A business that operates as a corporation without formal legal acknowledgment but is treated as such for some purposes.

Corporation's Bylaws

The written rules for conduct of a corporation, detailing the rights and obligations of the directors, officers, and shareholders.

Perpetrate A Fraud

The act of intentionally deceiving someone or a group in order to gain an unfair or illegal advantage, often financial.