edman and Phelps. More specifically, it led to the interpretation of other ‘anti-Keynesian’ contributions by the Monetarists, such as the Phillips Curve and the “St. Louis” equations. It is these contradictions to Keynesian equations used to analyze macroeconomic policy, such as the money-income dilemma, money supply model, the development of the Phillips Curve, and the advocacy of a disinflation policy, that were acutely precarious for Keynesian theory. On the other hand it has been mentioned, that without the natural rate hypothesis that this would be inconsequential. Above all it was the Monetarist's natural rate hypothesis that served as the barrel pillory for the Neo-Keynesian system; and it is from this that the modern classical economics was born, and by this held together. Keynes Income Expenditure Model had great opposition; the Monetarist devoted their entirety to disproving this Keynesian theory. The Keynes’ basic income-expenditure model suggests that it is the key to understanding macroeconomic problems in the market for goods and services, but when analyzed this model completely ignores other crucial aspects of economics. It is these basic characteristics that deliberation of policies arose: 1.“Keynesians believe that the interest rate, largely, if not wholly, a monetary phenomenon, is determined by the supply of and demand for money. Monetarists believe that the interest rate, largely a real phenomenon, is determined by the supply of and demand for loanable funds, a market, which faithfully reflects actual opportunities and constraints in the investment sector. 2.In the Keynesian vision, a change in the interest rate has little effect on (aggregate) investment; in the Monetarist vision, a change in the interest rate has a substantial effect on (aggregate) investment. This difference reflects, in large part, the short-run orientation of Keynesians and the long-run orientation of Mon...
