Flashcards on Milton Friedman: Life and Economic Theories
Milton Friedman: Life and Economic Theories Summary for Students
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Milton Friedman and Monetarism
17 cards
Card 1
Question: Who was Milton Friedman and when was he born?
Answer: An American economist and intellectual of Jewish origin, born in New York on July 31, 1912.
Card 2
Question: Which major prize did Milton Friedman receive and in what year?
Answer: The Nobel Prize in Economics in 1976.
Card 3
Question: With which school of economic thought is Milton Friedman most closely associated?
Answer: The Chicago School and monetarism; he is a leading representative of monetarists.
Card 4
Question: What is the core monetarist idea Friedman promoted about money and inflation?
Answer: There is a clear relationship between the amount of money in circulation and inflation; controlling money supply growth controls inflation.
Card 5
Question: What monetary policy did Friedman recommend to control inflation?
Answer: Limit the growth of the money supply to a constant and moderate annual rate and supervise base money effectively.
Card 6
Question: How did Friedman’s view differ from Keynes regarding consumption?
Answer: Keynes said consumption depends on current period income; Friedman proposed consumption depends on permanent (long-term) income.
Card 7
Question: How did Friedman modify the Phillips Curve concept?
Answer: He introduced the role of expectations, correcting the Phillips Curve by emphasizing expected inflation's effect.
Card 8
Question: What metaphor did Friedman use to illustrate the effects of printing money, and what is its conclusion?
Answer: The 'helicopter' metaphor: dropping money uniformly makes nominal prices rise but does not increase real goods or productive capacity, causing inflati
Card 9
Question: According to Friedman’s helicopter example, why does printing money not improve real living standards?
Answer: Because extra money increases nominal prices without increasing raw materials, goods, services, or productive capacity, so real purchasing power does
Card 10
Question: How did Friedman view government intervention and public-sector actions to stabilize the economy?
Answer: He was strongly opposed to state intervention in aggregate demand and public-sector actions aimed at economic stabilization; he favored free markets a