Question

Which best describes a difference between the views of Milton Friedman and John Maynard Keynes on the economy?

Friedman said that monetary policy should be used to influence aggregate demand, while Keynes believed the best approach was fiscal policy.
Friedman said that fiscal policy should be used to influence aggregate demand, while Keynes believed the best approach was monetary policy.
Keynes believed in little government intervention in the economy, while Friedman said government should play an active role.
Keynes believed the economy was too complicated to think of aggregates, while Friedman said higher aggregate demand could solve issues.

Answer 1

The first option. Friedman emphasized using monetary policy (control of the money supply/interest rates) to manage aggregate demand, while Keynes advocated active fiscal policy (government spending and deficits) to stabilize output and employment.