Monetarists Argue That

question 214

Multiple Choice

Monetarists argue that:

• A) the Federal Reserve System should allow the money supply to increase at a slow, steady annual rate.
• B) since the velocity of money is unstable, a fixed annual increase in the money supply will exacerbate inflation in the long run.
• C) self-correction is less effective than activist monetary policy.
• D) fiscal policy should always be used before monetary policy.

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Definitions:

Master Budget

The master budget is a comprehensive financial planning document that includes all of a company's budgeted financial statements and operating plans for a specific period.

Raw Materials

The basic materials and components used in the production processes of manufacturing goods.

Finished Goods Inventory

The completed products that are ready for sale but have not yet been sold.

Cash Collections

The process of gathering all monies owed to a company by its customers, reflecting inflow of cash.