00:01
Which of the following policy recommendations are consistent with the classical keynesian, monetarous supply side, and or great moderation consensus views of the macroeconomy and stabilization policy.
00:17
Since the long -run growth rate of gdp is 2 % per year, the money supply should grow at 2 % per year.
00:23
Related with monetarist schools of thought, monetary schools of thought were founded by milton friedman.
00:29
Gross domestic product increases at 2%, which must be increasing money supply at 2%.
00:35
Otherwise, it creates inflation or deflation situations, which means suppose the money supply increases 3 % with a 2 % gdp.
00:43
This would create inflation or money supply growth is below gdp, which leads to deflation.
00:50
Decrease government spending in order to decrease inflationary pressure.
00:55
This is related to supply -side economics.
00:57
Supply -side economics gives more important to supply -side factors, which leads to economic growth.
01:05
Government increases spending for increasing overall supply.
01:08
It shifts the as curve, which helps to reduce inflationary pressure.
01:13
Increase the money supply side in order to alleviate a recessionary gap...