[Online Document Assignment:]
EIA Activity: The Fed’s Flirtation with Monetarism
Click on the links on the right to answer the following questions.
Use Link 1 to answer the following questions. True or False: Monetarism is the belief that the money supply determines the current dollar amount of GDP in the short run, and prices in the long run.
| A. |
| B. |
True or False: According to monetarists, the objective of monetary policy is best met by targeting the growth rate of the money supply.
| A. |
| B. |
True or False: Monetarism is attributed to bringing down inflation in both the United States and the United Kingdom in the 1970s.
| A. |
| B. |
True or False: The ideas of monetarism did not influence the U.S. central bank’s decision to help stimulate the economy during the Great Recession.
| A. |
| B. |
True or False: Economist Milton Friedman is the face of monetarism.
| A. |
| B. |
Discuss the pros and cons of setting official target interest rates.
What are the benefits of setting official target interest rates? Discuss.
Do you agree with the ideas of monetarism? Yes or no? Explain.
<<Settings>> [suggested defaults are bold]