Question

Traditional monetarists advocate for a rule for ___________, while market monetarists argue that monetary policy should focus on a ______________________.

Answer 1

Full sentence is:

Traditional monetarists advocate for a rule for money supply growth, while market monetarists argue that monetary policy should focus on a nominal GDP target .

Explanation:

Monetarism is based on the idea that an increase in the money supply, that is, the total cash and checks circulating in the economy, will increase production in the short term and inflation in the long term.

Monetarism states that while the monetary authorities (central bank or others) have control of the nominal offer, people base their decisions on the amount of real money they wish to obtain / maintain.