Classical economists and modern monetarists agree that the best way to examine the economy is through the use of
A) aggregate supply and demand.
B) the multiplier.
C) the quantity theory.
D) the GNP account.

Question

Quizplus · Accepted Answer

The quantity theory is a monetary theory that states that the price level is directly proportional to the quantity of money in circulation. Classical economists and modern monetarists both believe that the quantity theory is the best way to examine the economy because it provides a simple and clear framework for understanding how changes in the money supply affect the price level and output.

Classical Economists and Modern Monetarists Agree That the Best Way