According to the Monetarist Point of View

question 152

Multiple Choice

According to the monetarist point of view

• A)to avoid inflation,the Federal Reserve should create reserves at the same rate as the velocity of money.
• B)velocity of money is not constant;therefore,the increase in the money supply should not be constant.
• C)in the short run,increased unemployment and/or reduced inflation are the result of a reduction in the growth of the money supply.
• D)in the short run,changes in the money supply can have no effect on output in the economy,only on prices.

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