In monetarist business cycle theory,the factor leading to a business cycle is changes in
A) consumer spending.
B) investment spending.
C) the growth rate of the quantity of money.
D) net exports.

Question

Quizplus · Accepted Answer

According to the monetarist business cycle theory, changes in the growth rate of the quantity of money are the main driver of business cycles. This is because changes in the money supply affect interest rates, which in turn impact investment and consumer spending. Therefore, the correct choice is C, the growth rate of the quantity of money.

In Monetarist Business Cycle Theory,the Factor Leading to a Business