Which of the Following Statements About the Monetarist View of the Macroeconomy

Multiple Choice

Which of the following statements about the monetarist view of the macroeconomy is incorrect?

A) Left alone, the economy rarely operates at full employment.
B) All recessions result from inappropriate monetary policy.
C) The money wage rate is sticky.
D) Taxes should be kept low to avoid disincentive effects that decrease potential GDP.
E) Provided that the quantity of money is kept on a steady growth path, no active stabilization is needed to offset changes in aggregate demand.