Monetarists Believe That

question 62

Multiple Choice

Monetarists believe that:

• A)the government should follow a fixed rule to change money supply in response to business cycles.
• B)the government should not use discretionary monetary policy to achieve its goals of economic growth and low inflation.
• C)government intervention should be well thought out and should be used only during recessions.
• D)government intervention in the economy makes business cycles disappear.
• E)government intervention policies have only long-run effects.

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Definitions:

Future Value

The value of an investment at a specified point in the future, accounting for factors like interest rates and compounding.

Payment

The transfer of money, or its equivalent, from one party to another in exchange for goods, services, or to fulfill a legal obligation.

Account Earning

The income generated from an investment or the revenue accrued from a bank account over a specific period.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value.