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

16086 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What is a public good?


I'm unsure how to structure my essay, which way is the best?


Explain why a demerit good is overconsumed, if left to market forces.


How do you know whether the demand for a good is price elastic or price inelastic?


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