The monetarists argued that to avoid inflation and unemployment, that:
A) the money supply growth rate has to be maintained at the highest level.
B) the money demand growth rate has to be maintained at the proper level.
C) the money supply growth rate has to be maintained at the proper level.
D) the interest rates have to be maintained at the proper level.

Question

Quizplus · Accepted Answer

Monetarists argue that the money supply growth rate has to be maintained at the proper level since an excessive growth rate of the money supply leads to inflation, while a low growth rate causes unemployment. Maintaining the proper level of money supply growth would result in a stable economy without excessive inflation or unemployment. Therefore, option C is the correct answer.

The Monetarists Argued That to Avoid Inflation and Unemployment, That