To reduce the level of unanticipated inflation,monetarists advocate
A)A sharp increase in short-term interest rates.
B)Steady and predictable changes in the money supply.
C)A decrease in short-term interest rates.

Question

Quizplus · Accepted Answer

Monetarists believe that a steady and predictable increase in the money supply can curb unanticipated inflation. This is achieved through the use of monetary policy tools such as open market operations, which aim to control the money supply in the economy. Increasing short-term interest rates may also help to reduce inflation, but this is often seen as a more drastic measure and can have negative effects on economic growth. Therefore, monetarists would prioritize a steady and predictable approach to controlling the money supply.

To Reduce the Level of Unanticipated Inflation,monetarists Advocate