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7 Cards in this Set
- Front
- Back
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Mainstream |
- Keynsian - Instability from changes in investment spending and supply shocks - AD shifts ==> change in RO and PL |
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Monetarists |
- Milton Friedman - Self correction slow and steady - Instability caused by changes in the money supply - MV=PQ
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Classicalists |
- Adam Smith - Laissez-faire - AS==> RO - AD==>PL - Say's law-supply creates its own demand - Prices and wages flexible |
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Keynsian |
- John Maynard Keynes - Circular flow of money - Prime the pump - AD-Unstable, affects output and employment - Prices and wages are sticky active govt. |
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New Classicalists |
Economy is self-correcting |
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Real Business Cycle |
Factors that affect AS cause instability |
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RET |
- Self interest, almost simultaneous correction - Unanticipated-change lag, temporary change in RO - Anticipated-quick changes |
