Monetarists would argue that the severe recession of 2007-2009 was primarily caused by
A)adverse aggregate-supply shocks causing tremendous unemployment.
B)wide swings in investment expenditures driving erratic fluctuations in aggregate demand.
C)excessive money supply creating a bubble in some sectors of the economy.
D)too much deregulation of the financial sector in previous years.

Question

Quizplus · Accepted Answer

Monetarists believe that fluctuations in the money supply are the main cause of economic instability. They would argue that excessive money supply led to a bubble, particularly in the housing sector, which contributed to the recession.

Monetarists Would Argue That the Severe Recession of 2007-2009 Was