The Rules-Based Monetary Policy That Some Nonactivists Have Proposed to Maintain

question 129

Multiple Choice

The rules-based monetary policy that some nonactivists have proposed to maintain price stability reads this way:

• A) The annual growth rate in the money supply will equal the average annual growth rate in Real GDP minus the growth rate in velocity.
• B) The annual growth rate in the money supply will equal the average annual growth rate in Real GDP plus the growth rate in velocity.
• C) The annual growth rate in the money supply will equal the average annual growth rate in Real GDP divided by the growth rate in velocity.
• D) The annual growth rate in the money supply will equal the average annual growth rate in Real GDP times the growth rate in velocity.