Modeling with Rational Functions — Unit test

Question 324 • Crowley Credit Recovery Algebra II B

Which best describes a difference between the views of Milton Friedman and John Maynard Keynes on the economy?

Answer

Friedman said that monetary policy should be used to influence aggregate demand, while Keynes believed the best approach was fiscal policy.

Friedman said that fiscal policy should be used to influence aggregate demand, while Keynes believed the best approach was monetary policy.

Keynes believed in little government intervention in the economy, while Friedman said government should play an active role.

Keynes believed the economy was too complicated to think of aggregates, while Friedman said higher aggregate demand could solve issues.

Explanation

Keynes argued that governments should use fiscal policy—such as changing spending or taxes—to influence aggregate demand, especially during downturns. Friedman, a monetarist, emphasized using monetary policy to manage the money supply and influence economic activity. Therefore, the best description is that Friedman favored monetary policy while Keynes favored fiscal policy.

AI-written and checked against the verified answer.

More from this Course

Unit Test

Unit Test

Unit Test