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) The money wage rate is sticky.
B) Taxes should be kept low to avoid disincentive effects that decrease potential GDP.
C) All recessions result from inappropriate monetary policy.
D) Left alone, the economy rarely operates at full employment.
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.