Which of the following policies is supported by the idea that producers and workers will demand higher prices and wages when they see the money supply expanding?
A) Discretionary policy
B) Fixed rules
C) The Fed's eclecticism
D) Fiscal policy

Question

Quizplus · Accepted Answer

The idea that producers and workers will demand higher prices and wages when they see the money supply expanding is supported by the concept of fixed rules. This approach suggests that a predictable, rule-based policy regarding the money supply can help manage expectations and prevent inflationary pressures that arise from anticipations of monetary expansion.

Which of the Following Policies Is Supported by the Idea