Question

Which of the following is true?
Monetarists argue that the crowding-out effect is rather large.
Monetarists advocate increasing the money supply by a constant rate year after year.
Keynesians advocate increasing the money supply during economic recessions but decreasing the money supply during economic expansions.
Keynesians argue that the crowding-out effect is rather insignificant.
All of these.

Answer 1

Answer: The correct answer is "All of these".

Explanation: All of these statements are TRUE.

Monetarism is an economic doctrine that studies the effects of variations in the money supply on the relevant economic variables (such as employment, prices or production).

Keynesianism is based on state interventionism, defending economic policy as the best tool to get out of an economic crisis. Its economic policy is to increase public spending to stimulate aggregate demand and thus increase production, investment and employment.