"Rapid growth in the money supply is the primary cause of inflation. The time period between acceleration in the growth rate of the money supply and an acceleration in inflation is often lengthy (for example, from 12 to 36 months) and difficult to predict." These two statements are
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A. B. C. D.C
Monetarists believe that monetary instability is the major cause of fluctuations in real GDP and rapid growth of the money supply is the major cause of inflation.
Monetarists cite lengthy and unpredictable time lags between the implementation of a monetary policy change and the observation of its primary effects as a justification for not using discretionary monetary policy as a stabilization tool.