Final answer:
Keynes favored expansionary fiscal policy, Friedman advocated for monetary policy, and Hayek believed in free-market economics.
Step-by-step explanation:
In the 1970s, influential economists Keynes, Friedman, and Hayek had different views on the use of monetary policy.
Keynes believed that during times of economic recession, the government should increase government spending and lower taxes to stimulate economic growth. This approach is known as expansionary fiscal policy.
Friedman, on the other hand, argued for a more limited role of government in the economy. He believed that monetary policy, specifically increasing the money supply at a constant pace, was the most effective way to stabilize the economy and prevent inflation.
Hayek, a proponent of free-market economics, believed that government intervention in the economy through monetary policy was inherently flawed. He argued that allowing the market to operate freely without government interference would lead to the most efficient allocation of resources and promote economic prosperity.