Under the Monetary Growth Rule Proposed by the Monetarists, the Money

question 214

Multiple Choice

Under the monetary growth rule proposed by the monetarists, the money supply would grow each year at a constant rate equal to the long-run rate of growth of

• A)inflation.
• B)real GDP.
• C)interest rates.
• D)employment.
• E)population.

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Definitions:

Inflation

The pace of ascent in the general pricing for goods and services, eroding the capability to buy.

Expansionary Gap

A situation where the actual output in an economy exceeds the potential output, typically leading to inflation.

Coordination

The process of organizing people or groups so that they work together properly and well.

Workers

Individuals engaged in any form of employment or labor, contributing their skills and efforts in exchange for compensation.