In economics, microeconomics is a term that respectively defines how people live and how the choices they make influence the economy. In other words, it is a study of families and how their choices affect the price of market goods and the economy in general. Monetary control or monetarism, on the other hand, is a theory stated by Milton Friedman that the money supply is the primary driver of economic growth. It is clear that there is a very close relationship between microeconomics and monetarism, as will be observed in this context. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayAccording to Milton Friedman, the control of money has a direct impact on microeconomics. It states that when a large amount of money is pumped into the monetary chain, it creates a demand for more money and, in the process, companies and other actors in an economy produce more goods and services thus creating new jobs (Friedmanr & Friedman, 2012 ). However, He warns that monetarism can only offer a temporary boost to the economy that could be followed by long-term recession and inflation. It is therefore important that the money supply is regulated to avoid a situation where demand could exceed supply and influence commodity prices and put many jobs at risk. In the past, money was a valuable measure of liquidity, but in the contemporary world, things have changed. world. Liquidity is considered as cash, market funds and receivables. On the other hand, bonds, loans, and mortgages are considered credits (Pindyck & Rubinfeld, 2018). Since money does not measure stocks, real estate and other assets, people today are more willing to invest in stocks than in money markets. This is because when stock markets skyrocket, people become richer and have purchasing power. For this reason, I disagree with Milton Friedman that monetarism determines microeconomics. On the other hand, I agree with Milton Friedman when he states that microeconomics can be greatly influenced by the money supply because when the quantity of money in an economy is expanded, the interest rate tends to decrease to encourage people to apply for loans to improve their businesses (Pindyck & Rubinfeld, 2018). Interest rates fall because banks have more money available to lend to people. This gives people the ability to borrow money to expand their businesses or purchase high-value goods to suit their lifestyle. In this case, it is clear that the money supply can significantly improve the microeconomy. Conversely, when money decreases in an economy, interest rates skyrocket and things become more expensive, thus directly affecting the population and its opportunity cost. In case the microeconomics dictates the money supply in the economy, the chances of inflation are doubled. For this reason, consumer sovereignty should be regulated by monetary control and not the other way around. This is in support of Milton Friedman when he stated that the cure for inflation is higher interest rates (Friedmanr & Friedman, 2012). While reducing the money supply can make life more difficult for the population through rising interest rates, it also introduces valuable principles such as cost-benefit comparisons where people calculate the cost of an item, evaluate its value and use the results to determine their course of action. . Other aspects such as incentives have a.