question archive Milton Friedman is an advocate for which of the following policy recommendations? a) Active fiscal policy to close recessionary and inflationary gaps
Milton Friedman is an advocate for which of the following policy recommendations? a) Active fiscal policy to close recessionary and inflationary gaps
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Milton Friedman is an advocate for which of the following policy recommendations?
a) Active fiscal policy to close recessionary and inflationary gaps.
b) Rapid expansion of the money supply during times of recession.
c) Frequent adjustments in the money supply to maintain a stable interest rate.
d) Constant money supply growth regardless of economic conditions.
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The correct option is c) Frequent adjustments in the money supply to maintain a stable interest rate.
Explanation:
Milton Friedman was a monetarist economist who believes in changes in the money supply instead of fiscal policy as the fiscal policy takes time to implement and affect the market factors. Monetary policy has a sudden impact on the economy due to which an economy maintains its stability in the short-run due to frequent adjustments.
