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the theory or policy of controlling the amount of money in circulation as the preferred method of stabilizing the economy
- Monetarism emphasizes the role of monetary policy over fiscal policy.
- Under monetarism, central banks focus on managing the growth rate of money.
- Monetarism suggests that inflation can be controlled by regulating the money supply.
- The central bank uses principles of monetarism to set interest rates.
- Supporters of monetarism believe that a stable money supply ensures economic stability.