Proponents of the monetarist approach to economic stabilization think that the growth of the money supply should be approximately equal to

A) the prime rate.
B) the long-term average growth of real output.
C) the real interest rate.
D) the growth of federal expenditures.
E) the growth of the federal budget.

Monetarist Approach

An economic theory emphasizing the role of governments in controlling the amount of money in circulation as a primary method in managing the economy and combating inflation.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including currency and balances held in checking and savings accounts.

Real Output

The total value of all goods and services produced in an economy, adjusted for inflation, reflecting the true productivity of the economy.