Compare keynesian and monetarist views on how the velocity of money is determined
Answers
................................One of the neat (in my opinion) things I used to do in elementary macro or money and banking class was to show how you can explain the basic equalities of the macro economy using two languages: the language of the equation of exchange (MV=PQ) and the Keynesian language built into our national income accounts (C + I + G + X - M). In both cases, total spending equals GDP (GNP way back then). If you want to focus on the role of money and monetary policy, your better bet is probably the equation of exchange. Otherwise, the Keynesian framework would probably be more useful, especially if your view of monetary policy focuses on interest rates rather than the money supply. Using the Keynesian framework, does not—repeat not—make you a Keynesian in terms of your policy preferences. It’s like talking about the economy in French and talking about the economy in English.