• Card 61 / 145: Nobel Prize–winner Milton Friedman advocated which of the following as an adequate monetary policy?
    A) a strict rule in which the money supply should grow at the rate of the long-run economic growth rate
    B) a discretionary rule in which the money supply should be adjusted to control the level of inflation rate
    C) a discretionary rule in which the money supply should be adjusted to counteract aggregate demand shocks
    D) a strict rule in which the money supply should grow 2 percent higher than the long-run economic growth rate

    Answer:
    A) a strict rule in which the money supply should grow at the rate of the long-run economic growth rate

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Macroeconomics MCQ

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