From a monetarist perspective, instability in the macroeconomy arises from
A) secular trends in the economy.
B) the instability of velocity as a policy tool.
C) discretionary changes in monetary policy.
D) the use of a monetary rule for monetary policy.

Question

Quizplus · Accepted Answer

Monetarists believe that instability in the macroeconomy arises from discretionary changes in monetary policy. They argue that attempting to manipulate the economy through discretionary changes in money supply growth rates only adds to economic instability by making it difficult to predict economic outcomes. They believe that the best way to promote macroeconomic stability is to adopt a simple monetary policy rule that provides a predictable framework for monetary policy.

From a Monetarist Perspective, Instability in the Macroeconomy Arises from