Monetarists would argue that the severe recession of 2007-2009 was primarily caused by:
A) Adverse aggregate-supply shocks causing tremendous unemployment
B) Wide swings in investment expenditures driving erratic fluctuations in aggregate demand
C) Excessive money supply creating a bubble in some sectors of the economy
D) Too much deregulation of the financial sector in previous years

Question

Quizplus · Accepted Answer

Monetarists believe that changes in the money supply have a major impact on the economy. They would argue that the recession was primarily caused by excessive growth in the money supply, which created an artificial boom in some sectors of the economy that eventually led to a bust. As a result, they would advocate for tighter control of the money supply to prevent future economic crises.

Monetarists Would Argue That the Severe Recession of 2007-2009 Was