If the Money Supply Is Growing at a Constant Rate

Multiple Choice

If the money supply is growing at a constant rate of 2% and the economy undergoes a negative demand shock, the theory of monetarism recommends:

A) coordinating a monetary expansion with a fiscal expansion to increase aggregate demand.
B) raising the growth rate of money supply to 3% to lower the interest rate.
C) lowering the growth rate of money supply to 1% to increase saving.
D) maintaining the growth rate of money supply at 2% and letting the aggregate price level fall.