The idea that the money supply should change to accommodate changes in aggregate demand is associated with the idea of ?
Correct answer: C. Milton Friedman
- A. Margaret Thatcher
- B. Ronald Reagan
- C. Milton Friedman
- D. John Maynard Keynes
Explanation
Milton Friedman’s monetarist approach gives the money supply a central role in stabilising aggregate demand and the price level. Thatcher and Reagan are associated with policies influenced by monetarism, but Friedman is the economist linked to the idea.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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