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Author Question: What are the defining features of monetarist macroeconomics and what policies do monetarist ... (Read 342 times)

09madisonrousseau09

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on: Jun 29, 2018
What are the defining features of monetarist macroeconomics and what policies do monetarist macroeconomists recommend?
 
  What will be an ideal response?

Question 2

Refer to Table 2-12. If the two countries specialize and trade, who should export sailboats?
 
  A) There is no basis for trade between the two countries.
  B) Guatemala
  C) They should both be importing sailboats.
  D) Honduras


amanda_14

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Monetarists believe that the economy is self-regulating and will typically operate at full employment if monetary policy is not erratic and the money growth rate is kept steady. The major source of business cycle fluctuations are similar to the Keynesian view, that is, changes in aggregate demand combined with a sticky money wage rate. However, according to monetarists, the changes in aggregate demand are the result of fluctuations in the growth rate of money caused by the Federal Reserve. Monetarists assert that the proper government policies are low taxes, to avoid the disincentive effects stressed by classical macroeconomists, and steady monetary growth.

Answer to Question 2

D


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