Ashford ECO 406: Week 2 – DQ 2 – Economic Theory

Ashford ECO 406: Week 2 – DQ 2 –  Economic Theory

1st Posting Due by Day 3. Economic Theory. Economists have always disputed about the appropriate action to take to stimulate an economy out of a recession. Compare and contrast the recommendations for appropriate action of the monetarist theory and the classical model. Be sure your response is stated in terms of the relevant principles of both theories.

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Economic theory

            Monetarist theory states that changes in money supply are the most significant determinants of the rate of economic growth and behavior of the business cycle.  Classical model is the economic theory of how things work.

            There are some differences and similarities of the monetarist theory and the classical model. The monetarists say that it is important to spend during recession period as compared to the classical theory that waits for the markets…

APA

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