Monetarists argue that the relationship between the amount of money which households and businesses want to hold and the level of national income

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Monetarists, such as Milton Friedman, argue that the demand for money in relation to the national income is stable over time. They believe that changes in the money supply directly affect prices, output, and employment in the short run and only prices in the long run, assuming the demand for money does not fluctuate wildly with economic cycles.

Monetarists Argue That the Relationship Between the Amount of Money