For Friedman, it’s not recommendable to use monetary policy to get out of a rece

Question

For Friedman, it’s not recommendable to use monetary policy to get out of a recession due to: A. The neutrality of money in the short run B. It end with a higher price level C. The economy is always in full employment D. All of the above For Friedman, it’s not recommendable to use monetary policy to get out of a recession due to: A. The neutrality of money in the short run B. It end with a higher price level C. The economy is always in full employment D. All of the above A. The neutrality of money in the short run B. It end with a higher price level C. The economy is always in full employment D. All of the above

Explanation / Answer

Ans-B. It end with a higher price level

Monetary Policy then Bank Regulation shows to us to that amount a interior financial institution may utilizes its powers upon the banking system after put in into countercyclical—or “against the enterprise cycle”—actions. If recession threatens, the interior financial institution uses an expansionary pecuniary policy in imitation of amplify the supply of money, amplify the content over loans, minimize hobby rates, and variation aggregation demand to the right. If inflation threatens, the mean bank utilizes contractionary pecuniary coverage to minimize the furnish over money, limit the amount about loans, develop activity rates, yet transfer volume make a bid according to the left. Fiscal policy is another macroeconomic coverage device for adjusting quantity claim by means of the use of both regime execution yet taxation policy.

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