Term for Identification: Monetarist

Question

Term for Identification:  Monetarist

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The Answer is A monetarist is an economist who holds the belief that the money supply is the most important factor in determining the rate of economic growth, the behavior of the business cycle, and the levels of inflation and deflation. Monetarism is a school of thought that emphasizes the role of governments in controlling the amount of money in circulation.

Monetarists assert that variations in the money supply have major influences on national output in the short run and the price level over longer periods. They argue that the objectives of monetary policy are best met by targeting the growth rate of the money supply rather than by engaging in discretionary fiscal policies.

The most notable proponent of monetarism is economist Milton Friedman. He argued that for a healthy economy, the money supply should be increased steadily at a rate approximately equal to the growth in productivity and demand for goods. This approach, he suggested, would maintain stable prices and a growing economy.

Monetarism gained prominence in the late 20th century, influencing the economic policies of various governments, particularly during the 1980s with the conservative governments of Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States, both of whom implemented monetarist-influenced policies to some extent.

While monetarism is not as widely embraced as it once was, its focus on the money supply continues to influence monetary policy decisions around the world. Central banks, such as the Federal Reserve in the United States, monitor the money supply and use interest rates and other tools to control inflation and stabilize the economy, reflecting some of the principles of monetarism.

Term for Identification: Monetarist

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