In Recent Years,a Monetary Growth Rule Has Fallen Out of Favor

question 173

Multiple Choice

In recent years,a monetary growth rule has fallen out of favor because

• A)it is believed that active monetary policy destabilizes the economy and makes the business cycle worse.
• B)the growth rate of GDP has been highly unstable.
• C)the close relationship between movements in M1 and movements in real GDP has become weaker.
• D)the growth rate of M1 has become more stable.

---

Definitions:

Debt-equity Ratio

A financial leverage gauge determined by the division of a company's complete liabilities by its stockholders' equity.

Bankruptcy Costs

Expenses and fees incurred during the process of declaring bankruptcy, which may include legal fees, accounting costs, trustee fees, and other associated costs.

Direct Bankruptcy Costs

Expenses directly associated with a company's bankruptcy process, including legal and administrative fees.

Indirect Bankruptcy Costs

Expenses that are not directly tied to the bankruptcy filing process but arise due to the reduced ability to conduct business efficiently, such as lost sales, diminished reputation, and impaired creditworthiness.