Author Question: In recent years, a monetary growth rule has fallen out of favor because A) the close relationship ... (Read 78 times)

WWatsford · **on:** Jun 29, 2018

In recent years, a monetary growth rule has fallen out of favor because

A) the close relationship between movements in M1 and movements in real GDP has become weaker.
B) it is believed that active monetary policy destabilizes the economy and makes the business cycle worse.
C) the growth rate of GDP has been highly unstable.
D) the growth rate of M1 has become more stable.

Question 2

If the multiplier is 5, the marginal propensity to consume must be 0.8.

Indicate whether the statement is true or false