Pablo believed that short-run changes in aggregate demand affected aggregate output as well as the price level. He believed that there was a role for monetary policy in managing the economy, but he advocated a simple monetary rule that would increase the money supply at a constant rate to grow the economy. Pablo was best described as a:
A)Keynesian.
B)new classical economist.
C)supply-sider.
D)monetarist.

Question

Quizplus · Accepted Answer

Pablo's belief that there was a role for monetary policy and advocating for a constant rate of increase in the money supply align with the principles of monetarism. Keynesians would focus more on fiscal policy as a means of managing the economy, while new classical economists would emphasize the importance of market forces and rational expectations. Supply-siders would focus on incentivizing supply through policies such as tax cuts.

Pablo Believed That Short-Run Changes in Aggregate Demand Affected Aggregate