"Followers of Milton Friedman of the University of Chicago were convinced that business cycles could be smoothed away simply by requiring the Federal Reserve to ____________. "

Please fill in the blank by selecting one of the answers below.

1. Keep the money supply constant.
2. Increase money supply growth in booms and decrease it during recessions.
3. Increase the money supply at the same rate during booms and recessions.
4. Increase money supply growth in recessions and decrease it in booms.