Who is most associated with monetarism in macroeconomic theory?

• A. Paul Samuelson
• B. John Maynard Keynes
• C. Milton Friedman
• D. David Ricardo

Answer: (C)

Monetarism focuses on money supply as the main driver of inflation and economic activity. Milton Friedman is the economist most associated with monetarism. He argued that fluctuations in the money supply primarily determine price levels and that policy should emphasize stable, predictable growth of the money stock rather than active fiscal stimulus. This leads to ideas like targeting a steady growth rule for the money supply and recognizing that, in the long run, changes in money affect prices rather than real output. Other figures mentioned are linked to different theories: Keynesian ideas on demand management, and Ricardo's classical models.