"Monetary instability has been the major cause of economic instability in this country.Expansion in the money supply has been the source of every major inflation.Every major recession has been either caused or perpetuated by monetary contraction." Who among the following would most likely adhere to this view?

Question

Quizplus · Accepted Answer

Monetarists believe that the key driver of economic instability is fluctuations in the money supply, and advocate for tight control of the money supply to promote price stability and steady economic growth. The statement given in the question aligns with this view. Keynesians, on the other hand, place more emphasis on fiscal policy and government intervention in the economy to manage economic instability. Supply-side economists focus on incentivizing production and supply rather than managing demand or money supply. Early proponents of the quantity theory of money were also focused on monetary policy, but their views have evolved over time and may not align as closely with the statement in the question.

"Monetary Instability Has Been the Major Cause of Economic Instability