Answer to Question #214515 in Macroeconomics for INGRID

Question

Essay on the monetarist theory of unemployment.

Answer 1

The monetarist hypothesis is an economic theory that claims that variations in money supply are the most important factors of economic development and business cycle behavior.

Monetarist policies were unduly damaging economic output, resulting in more than necessary unemployment and poorer GDP. The relationship between money supply and inflation, in particular, was far less than monetarist theory projected.