Author Question: Monetarists reject using discretionary monetary policy as an effective stabilization tool because ... (Read 69 times)

melina_rosy · **on:** Jun 30, 2018

Monetarists reject using discretionary monetary policy as an effective stabilization tool because they believe:
a. if the money supply grows at a rate equal to the economy's long-run rate of economic growth, then the economy will be unstable.
b. that changes in the money stock do not affect output or prices.
c. the Fed will miss its money supply targets and make the economy worse.
d. monetary policy can stimulate aggregate demand, but it cannot affect inflation.

Question 2

An example of frictional unemployment is a(n):
a. textile worker permanently laid off due to jobs lost to imports.
b. engineer permanently laid off due to advances in technology.
c. fast-food restaurant worker who quits work and attends college.
d. computer programmer who leaves one job and accepts a new job.