match each view with the school of thought it would be associated with 9. Study

Question

match each view with the school of thought it would be associated with 9. Study Questions and problems #9 Match each view with the school of thought it would be associated with. View of Inflation School of Thought An increase in the monetary supply will drive down interest rates. The interest rate decrease will shift the aggregate demand curve out The aggregate demand shifting out will increase the price level, which is also known as inflation Keynesiarn According to the equation of exchange, an increase in the monetary supply will directly increase the price level, which is also known as inflation. Monetarist Grade It Now Sav Continus

Explanation / Answer

1. Keynesian

Increase in Money supply lowers the rate of interest which stimulates the investment and the aggregate demand.

2. Monetarist

Money supply ha sdirect effect on price by changing real and nominal demand.

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