Final answer:
Monetarism, a macroeconomic theory, suggests that government control of the money supply is vital for economic stability, focusing on restricting the money supply to curb inflation rather than the aggregate supply curve or market competitiveness.
Step-by-step explanation:
Monetarism is a school of thought in macroeconomic theory that emphasizes the role of governments in controlling the amount of money in circulation. The monetarist view of macroeconomics holds several key beliefs. Firstly, monetarists argue that restricting the money supply will lead to greater economic stability by tackling inflation.
Secondly, monetarism does not primarily focus on the aggregate supply curve; instead, it concentrates on the money supply as a means of controlling the economy. Lastly, while monetarists acknowledge the efficacy of a competitive market system, their central concern is not the degree of competitiveness in markets but rather how steady growth in the money supply can prevent it from being a major source of economic disturbance.
Milton Friedman, a prominent economist within this field, advocated for a constant growth rate in the money supply, suggesting that this would align with the real growth of the economy and mitigate the potential economic instability resulting from an overly active central bank.