Monetarists think that
A)money growth is closely related to inflation in the long run.
B)money demand is unstable in the long run.
C)the central should focus on short run economic fluctuations.
D)the central bank should rely on discretionary policy making.

Question

Quizplus · Accepted Answer

Monetarists believe that there is a strong relationship between the growth of the money supply and inflation in the long run. They argue that excessive money creation by the central bank will eventually lead to inflation, and therefore advocate for a strict control of the money supply. Monetarists also tend to favor rules-based rather than discretionary monetary policy, in order to avoid the potential for political interference or short-termism in decision-making.

Monetarists Think That