Business, 17.08.2021 23:00, zacharynugent

Monetarists believe: since the economy is operating at full employment, any stimulative monetary policy will cause the inflation rate to rise. the cause-and-effect relationship hypothesized by the Keynesians is an accurate description of how monetary policy works. the cause-and-effect relationship hypothesized by the Keynesians is backwards, and decreases in the money supply actually stimulate economic activity. the cause-and-effect relationship hypothesized by the Keynesians understates the impact of stimulative monetary policy.

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Monetarists believe: since the economy is operating at full employment, any stimulative monetary pol...