Monetarists believe theres a direct link between the money


Monetarists believe there's a direct link between the money supply and prices, real GDP, and employment. If the money supply is allowed to grow at a predictable rate, the economy will stay in balance. In effect, they feel that in the long-run, the economy will be stable at full employment if the velocity of money is predictable.

The Monetarists could have ended the Great Depression and brought the economy back to full employment. The Depression never would have happened if the Monetarists had been in charge.

Would a Monetarist be more likely to favor fiscal, monetary, or neither policy? Why?

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Business Economics: Monetarists believe theres a direct link between the money
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