Percentage rate equal to long-run growth rate of real GDP

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Milton Friedman would have liked the Fed to follow a monetary rule where the A.interest rate is increased every year by a percentage rate equal to the long-run growth rate of real GDP B.money supply is increased every year by a percentage rate equal to the long-run growth rate of real GDP. C.money supply is increased every year by a percentage rate equal to the short-run growth rate of nominal GDP. D.money supply is kept unchanged as Milton Friendman did not want the Fed to intervene with the market economy. (13.2) Support for a monetary rule of the kind advocated by Friendman declined since 1980 because A. the Fed had actually practiced inflation targeting for a few years before the 1980s with very unfavorable results. B. the Fed's performance since 1980 has been excellent even without a formal inflation target. C.the large following of Milton Friedman has dwindled since 1980s. D. other countries that follow inflation targeting have had less than a desirable effect on their economy.

Reference no: EM131112269

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