Monetarist Theory

Monetarist Theory,

Definition of Monetarist Theory:

  1. Monetarist Theory means, Monetary theory is an economic concept that states that changes in the amount of money are fundamental factors in economic growth and business behavior. The competitive theory of monetary theory is Keynesian economics. When the monetarist theory works, the central bank, which controls the monetary policy holders, can gain a lot of power over the growth rate.

    • According to monetarist theory, the amount of money is the most important determinant of economic growth.
    • This formula is regulated by MV = PQ, where M = amount of money, V = speed of money, P = cost of goods and price = quantity of goods and services.
    • The Federal Reserve controls the currency in the United States and uses three main levers (reserve rate, discount rate, and open market operations) to increase or decrease the amount of money in the economy.

Literal Meanings of Monetarist Theory


Meanings of Theory:
  1. Assumptions or systems of ideas that aim to explain something are based on general principles, regardless of what is being explained.

Sentences of Theory
  1. Darwin's theory of evolution

Synonyms of Theory

presupposition, surmise, notion, proposition, assumption, feeling, conjecture, guess, hypothesis, supposition, hunch, postulate, speculation, postulation, thesis, premise, presumption, suspicion