Question

In contrast to the Monetarists, the Keynesians assume that the velocity of money varies directly with _______________..

Answer 1

Government expenditures

Step-by-step explanation:

The major difference between the monetarist and Keynesian economic theory is that the monetarist argue for the control of money in the economy while the Keynesian economics involve the government expenditures. According to monetarists the controlling the flow of money allows the market to recover by itself while the Keynesian economics argues that an economy keeps going down unless government intervenes. Milton Friedman formulated the monetarist economic theory and John Maynard Keynes formulated the Keynesian economics theory.