Which of the following statements is correct?

A) Monetarists believe that the economy is inherently unstable.
B) Monetarists believe that policy activism is one of the principal causes of economic instability.
C) Although monetarists are basically non-interventionist,they are in favor of activist monetary policy.
D) Monetarists argue that changes in M1 affect GDP only through changes in interest rates.
E) Monetarists believe that discretionary monetary policy is essential to successful economic stabilization efforts.

Monetarists

Economists advocating the belief that adjustments in the money supply have significant repercussions on the national output in the near term and on price levels in the more distant future.

Policy Activism

An approach whereby government or policymakers actively intervene in the economy to achieve certain goals, like reducing unemployment or controlling inflation.

Economic Instability

A situation where an economy experiences significant fluctuations in its economic activities, such as employment, output, and prices, often leading to uncertainty and unpredictability.