The belief that monetary policy can be effective in changing aggregate demand and that interest rates are the critical monetary variable is associated with (A)Modern Keynesians (B)New classical economists (C)Monetarists (D) All of the above

To determine the correct answer to this question, we need to understand the beliefs and theories of each group mentioned and then match them with the statement provided.

(A) Modern Keynesians: Modern Keynesians are economists who draw on the work of John Maynard Keynes and believe that government intervention, particularly through fiscal policy, is essential to stabilize the economy. They emphasize the importance of aggregate demand in determining economic output.

(B) New classical economists: New classical economists believe in the classical theory of economics, which assumes that markets are efficient and will naturally self-adjust to shocks. They argue that government intervention is unnecessary, as market forces will lead to equilibrium.

(C) Monetarists: Monetarists follow the theories of Milton Friedman and place great importance on the role of money supply in determining total output and inflation. They believe that controlling the money supply is crucial for managing the economy effectively.

Comparing these groups' beliefs with the statement provided, we can see that the belief that monetary policy can be effective in changing aggregate demand and that interest rates are the critical monetary variable aligns with the views of monetarists (C). Therefore, the answer to the question is (C) Monetarists.