"How do we prevent the inflationary fire from igniting again and stop the roller coaster ride in the inflation rate of the last 40 years?" Milton Friedman's famous proposition suggests the simple solution:
A)reduce the number of terms that politicians are allowed to serve.
B)reduce the growth rate of the money supply.
C)reduce the marginal tax rate on low-income wage earners.
D)increase the marginal tax rates on businesses that hike prices in excess of 5 percent per year.

Question

Quizplus · Accepted Answer

Milton Friedman's famous proposition suggests that reducing the growth rate of the money supply can prevent inflationary fires from igniting again and stop the roller coaster ride in the inflation rate of the last 40 years. This is because an increase in the money supply can lead to an increase in demand, which can lead to price increases and inflation. By reducing the growth rate of the money supply, there is less money in the economy to drive up demand and prices, resulting in lower inflation.

"How Do We Prevent the Inflationary Fire from Igniting Again