Monetarists take the position that monetary policy:
A) Is limited by the crowding-out effect on investment
B) Is enhanced by the crowding-out effect on investment
C) Should be based on rules rather than discretion
D) Should be based on discretion rather than rules

Question

Quizplus · Accepted Answer

Monetarists believe that monetary policy should be based on rules rather than discretion. This means that the central bank should establish a clear and consistent framework for making decisions about interest rates and money supply growth, rather than reacting to economic conditions on a case-by-case basis. This approach is meant to reduce uncertainty and promote stability in the economy. Monetarists do not believe that monetary policy is enhanced by the crowding-out effect on investment, as this effect reduces the impact of monetary policy on the overall economy.

Monetarists Take the Position That Monetary Policy