Explain the difference between the Monetarist and Keynesian views of unemployment

Monetarists believe that prices and money wages are flexible and can adjust quickly, meaning that the real wage is at the right level to achieve long run equilibrium in the labour market. All unemployment is classified by a monetarist as 'voluntary'. Keynesians contrastingly believe that money wages are slow to adjust to changes in the economy and so the real wage may not adjust to clear the labour market. This means there can be voluntary as well as involuntary unemployment. The problem with unemployment according to Keynesians is that the 'short run' can actually be quite a long time which is why government intervention is advised.

TH
Answered by Tom H. Economics tutor

15617 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Using a diagram, explain how an economy's exchange rate is determined. 4 marks. AS Level The National and International Economy


How can the Government increase aggregate demand


List and explain some ways in which a monopolistic firm can use it's lower costs as a barrier to entry.


Do the benefits of protectionist trade policies outweigh the costs?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning