Keynesian, Monetarist, Fiscal Policy, Unemployment, Inflation

Keywords: Keynesian, Monetarist, Fiscal policy, Unemployment, Inflation The Keynesian-Monetarist Debate When looking from both side of the Keynesians and Monetarist argument, we notice that both sides are correct in different terms. How unemployment is resolved in a labor market is opposed on the Keynesian side. While the Monetarist looked at the quantity of money, which should be increasing at a constant rate. The Monetarist reduce the money supply, which reduces the spending’s and increases the unemployment rate. Keynesian The public eye of the Keynesians was John Maynard Keynes. To have input on the Keynesian side, one must have employment to make any type of income. Keynesians have a high level of output of spending’s, also know as, rate of spending. At a rate of spending, aggregate demand is a graph that shows â€Å"the relationship between the price level and the quantity of GDP† (Hubbard O’Brien 414). Keynesians often use the â€Å"spending stream† which is displayed as customer and capital goods that are being paid for by the people. During a depression, workers will take any job they can, even if it means to be working at a lower or less costly wage. Monetarist The second school of economic called Monetarism; which maintains the money supply: the total amount of money in an economy. Money supply is the chief determinant of current dollar of GDP, in the short-run and the price level over long periods of time. Monetary policy is one of the tools government has to affect theShow MoreRelatedKeynesian Theory During The Great Depression949 Words   |  4 Pagesestablishment of the Keynesian theory during the Great Depression, there was a continuous rivalry between Keynesians and monetarists. 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Market942 Words   |  4 PagesMeg Guild Mr.Bare Economics 31 April 2017 Market Place Essay Five Key Questions about Macroeconomics Policy The recession in 1974—1975 and two other back to back recessions in 1979—1982, which sent the employment rate to 11%. The inflation rate rose into double digits then plummeted. A period of Great Moderation came after 1985, and the recession of 1990—1991 was more manageable than the previous recession. Unfortunately, this period of tranquility was followed by the Great Recession which