Monetarists Reject Using Discretionary Monetary Policy as an Effective Stabilization

question 29

Multiple Choice

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

• A) it would require the money supply to grow at a rate equal to the economy's long-run rate of economic growth.
• B) they do not believe that changes in the money stock affect output or prices.
• C) they believe that there are lengthy and variable time lags between when a change in monetary policy is instituted and when the change exerts its primary impact on output and prices.
• D) they believe monetary policy can stimulate aggregate demand, but it cannot control inflation.

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Definitions:

Extension-of-Self

The concept of external objects being perceived as part of one's identity or self.

Self-Esteem

The degree to which an individual values themselves, which can influence their motivation, behavior, and emotional wellbeing.

Study of Values

The examination of people's beliefs about what is important in life, which can influence their behavior and decision-making processes.

Thematic Apperception Test

A projective psychological test that asks respondents to create stories about ambiguous images, used to uncover underlying thoughts, feelings, and themes.