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The following table summarizes the policy effects of increases in the indicated variables for each macroeconomic theory.  The effects of a decease is just the opposite of those presented here. Long run results assume that the economy began at full employment.  The following notation is used in the table; + means an increase, - means a decrease, 0 means that there is no change, and ? means that the outcome is indeterminate.
 
 

		Aggregate Demand	Effect on  Aggregate Supply	Price  Level	Output
Keynesian Model
	Government Spending	+	0	+	+
	Government  Taxation	-	0	-	-
	Autonomous Consumption, Investment, or Net exports	+	0	+	+
	Money Supply	+	0	+	+
Monetarist  Model
	Money Supply Short run Long run	+ +	0 +	+ +	+ 0
	Government Borrowing	+	0	+	+
	Money Demand Short run Long run	- -	0 -	- -	- 0
Rational  Expectations Model
	Anticipated  Increases in Aggregate  Demand	+	+	+	0
	Unanticipated  Increases in Aggregate  Demand	+	0	+	+
	Government  Borrowing	0	0	0	0
	Constantly  Changing Government  Policies	?	-	?	-
Real Business Cycle Model
	Technological  Innovation	+	+	?	+
Supply Side Economics
	Changes  in the Marginal  Tax Rate	0	-	+	-

Recall that output can not exceed the full capacity of the society, as determined by the production possiblities boundary.  It is assumed that in the long run the economy is at full efficiency so none of these changes can affect output in the long run unless it also moves the aggregate supply curve. Monetary policy does not affect aggregate supply but fiscal policy can.  So monetary policy effects in this table are for the short run only.

In the simple Keynesian model changes in the money supply only effects investment if it changes the interest rate.  In this table I have assumed that an increase in the money supply will decrease the interest rate which will increase investment and consequently aggregate demand.

In the simple Monetarist model more government money only affects demand if it increases interest rates.  The increase in the interest rate causes people to reduce their money holdings which increases total spending.

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