Which macroeconomic model states that changes in the money supply affect aggregate demand directly,but stabilization policies utilizing discretionary monetary policy is too difficult to do?
A)Traditional Keynesian
B)New classical
C)New Keynesian
D)Modern monetarism

Question

Quizplus · Accepted Answer

The model being described is Modern Monetarism, which argues that changes in the money supply have a direct impact on aggregate demand, but that stabilization policies utilizing discretionary monetary policy are difficult to implement effectively. This theory emphasizes the importance of a stable and predictable growth rate in the money supply.

Which Macroeconomic Model States That Changes in the Money Supply