What is the monetarist theory of economics?

The monetarist theory is an economic concept that contends that changes in money supply are the most significant determinants of the rate of economic growth and the behavior of the business cycle.

What are the basic characteristics of the monetarist school of thought?

Characteristics of Monetarism The theoretical foundation is the Quantity Theory of Money. The economy is inherently stable. Markets work well when left to themselves. Government intervention can often times destabilize things more than they help.

Which statement best describes the idea of monetarism?

Which statement best describes the idea of monetarism? Monetary policy is the best way to influence economic growth.

What is a monetarist approach?

Monetarism is a macroeconomic theory which states that governments can foster economic stability by targeting the growth rate of the money supply. Essentially, it is a set of views based on the belief that the total amount of money in an economy is the primary determinant of economic growth.

Is monetarist better than Keynesian?

Monetarists are more critical of the ability of fiscal policy to stimulate economic growth. Monetarists /classical economists believe wages are more flexible and likely to adjust downwards to prevent real wage unemployment. Monetarists stress the importance of controlling the money supply to keep inflation low.

Who is the founder of monetarism?

American economist Milton Friedman is generally regarded as monetarism’s leading exponent. Friedman and other monetarists advocate a macroeconomic theory and policy that diverge significantly from those of the formerly dominant Keynesian school.

What is monetarist perspective?

What is the monetarist view?

What Is a Monetarist? A monetarist is an economist who holds the strong belief that money supply—including physical currency, deposits, and credit—is the primary factor affecting demand in an economy.

What is meant by monetarism?

Definition of monetarism : a theory in economics that stable economic growth can be assured only by control of the rate of increase of the money supply to match the capacity for growth of real productivity.