The Circular Flow and Income-Spending Streams tell us that in
the economy, total output must equal total
spending. This idea is the basis for all macroeconomic
analysis. John Maynard Keynes and his followers (the
Keynesians) use this idea, and Milton Friedman and
his followers (the Monetarists) do too. However,
they come up with very different conclusions regarding the role of
government in the economy.
Your assignment is to explain the basic arguments of each school
of thought, Keynesian and Monetarist,...