Question

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

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

Answer 1

The incorrect statement about the monetarist view is that all recessions result from inappropriate monetary policy, as recessions can be caused by a variety of economic factors, not solely by monetary ones.

Step-by-step explanation:

The statement about the monetarist view of the macroeconomy that is incorrect is: All recessions result from inappropriate monetary policy. Monetarists believe that while monetary policy can greatly influence economic performance and is important in combating inflation and recession, it is not the sole cause of all recessions. Multiple factors can contribute to a recession, including external shocks, fiscal policy errors, and other non-monetary issues. The other statements provided relate to the perspectives of Keynesian economics rather than monetarism and may not directly reflect monetarist beliefs.