Question
Write a response to the post. I'm having trouble replying because it is not enough information. Should the government use monetary and fiscal policy to
Write a response to the post. I'm having trouble replying because it is not enough information.
Should the government use monetary and fiscal policy to stabilize the economy, or should it adhere to policy rules and refrain from upsetting the economy?To answer this question please compare and contrast the view of Keynesian economics to Monetarist economists.
I agree that the government should use monetary and fiscal policy to stabilize the economy. Both the Keynesian and Monetarism theories work toward the same goal. The Keynesian focuses on aggregate demand influencing output and inflation, while the Monetarist focuses on the money supply. As stated by UMGC (2021), "But one school of economic thought, called Monetarism, maintains that the money supply (the total amount of money in an economy) is the chief determinant of current-dollar GDP in the short run and the price level over longer periods." Where the Keynesian controls taxes and the governments' expenditures.
What wouldthe Classicalshave thought about the Fed's handling of the financial crisis?Compare theClassicals'view toMonetarist'viewFed's handling of the financial crisis.
The Classicals have a mentality that the economy will self-regulate, and the monetarist believes that their theory works in handling a financial crisis. The classical view towards the Monetarist is for the Monetarist not to be involved unless necessary or a last resort.
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