(Answered) 1 what policy rule do monetarists believe the fed should

Economics

1) What policy rule do monetarists believe the Fed should follow? What are the major assumptions underlying this policy prescription?

2) What average annual inflation rate would a monetarist expect if the Fed maintained a growth rate of M2 = 10% per year for a three year period? (Assume that the monetarist felt that the long run average growth rate of RGDP was 3%)

Average annual inflation rate = 10-3 =7%

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