____ is a school of economic thought that uses equation of exchange to analyze the macroeconomic data.

Question

Quizplus · Accepted Answer

Monetarism is a school of economic thought that emphasizes the role of money supply in economic policy. It uses the equation of exchange (MV=PQ) to analyze the macroeconomic data, where M is the money supply, V is the velocity of money, P is the price level, and Q is the real output. Monetarists believe that increasing the money supply at a steady rate can stimulate economic growth, while excessive monetary expansion can lead to inflation.

____ Is a School of Economic Thought That Uses Equation