State briefly the key propositions of Monetarists School of Macro Economics.

The key propositions of the Monetarists School of Macro Economics can be summarized as follows:

1. Quantity Theory of Money: Monetarists believe that changes in the money supply have a direct and proportional impact on the price level in the economy. They argue that inflation is primarily caused by excessive growth in the money supply.

2. Money Neutrality: Monetarists assert that in the long run, changes in the money supply only affect nominal variables such as prices and wages, but not real variables such as output and employment. They argue that monetary policy can only have a temporary impact on real variables.

3. Role of Central Bank: Monetarists emphasize the importance of a stable and predictable monetary policy conducted by the central bank. They advocate for a rule-based approach to monetary policy, where the growth rate of the money supply is determined by a fixed rule rather than discretionary decisions.

4. Rational Expectations: Monetarists assume that individuals have rational expectations and can accurately predict future economic conditions. They argue that monetary policy can only be effective if it is consistent with the expectations of economic agents.

5. Critique of Fiscal Policy: Monetarists are skeptical of the effectiveness of fiscal policy in stabilizing the economy. They believe that changes in government spending and taxation have limited impact on aggregate demand and can be offset by changes in private sector behavior.

Overall, the Monetarists School of Macro Economics places a strong emphasis on the role of money and the importance of stable monetary policy in influencing economic outcomes.