ABSTRACT
The proponents of monetary policy agree with the essential elements of the economic theory explained in Chapter 14, that levels of GDP, employ ment, and income depend on total spending. Consumers, investors, gov ernment and foreigners must spend just enough to buy up the economy’s full employment level of output, and no more. If spending is too low, poli cies should encourage it; if spending is too high, policies should discour age it.
