Keynesian and Neoclassical Economics Flashcards

Equilibrium at a level of output above potential GDP

The payment for borrowed money

<p>Equilibrium at a level of output below potential GDP</p> Signup and view all the answers

<p>Downward wage and price flexibility requires perfect information about the level of lower compensation acceptable to other laborers and market participants</p> Signup and view all the answers

<p>A Keynesian concept that asserts that a change in autonomous spending causes a more than proportionate change in real GDP</p> Signup and view all the answers

<p>Occurs when what happens at the macro level is different from and inferior to what happens at the micro level</p> Signup and view all the answers

<p>Costs firms face in changing prices</p> Signup and view all the answers

<p>A situation where wages and prices do not fall in response to a decrease in demand, or do not rise in response to an increase in demand</p> Signup and view all the answers

<p>The ratio of the change in GDP to the change in aggregate expenditure which caused the change in GDP; the multiplier has a value greater than one</p> Signup and view all the answers

<p>Percentage of an increase (or decrease) in income which one spends (or reduces spending)</p> Signup and view all the answers

<p>Percentage of an increase (or decrease) in income which one spends (or reduces spending) on imported goods and services</p> Signup and view all the answers

<p>Percentage of an increase (or decrease) in income which one saves (or reduces saving)</p> Signup and view all the answers

<p>Efforts to decrease aggregate demand through tax increases or government spending cuts</p> Signup and view all the answers

<p>Efforts to increase aggregate demand through means such as tax cuts to stimulate consumption and investment, or direct increases in government spending</p> Signup and view all the answers

<p>The difference between actual and potential real GDP</p> Signup and view all the answers

<p>Earliest of a number of neoclassical perspectives</p> Signup and view all the answers

<p>Any of a number of economic perspectives that believes that the macro economy is inherently stable and that government should not attempt to manage the economy</p> Signup and view all the answers

<p>'Supply creates its own demand'</p> Signup and view all the answers

<p>Education, training, and skills possessed by workers that make them more productive</p> Signup and view all the answers

<p>Rate that unemployment returns to in the long run, where there is no cyclical unemployment</p> Signup and view all the answers

<p>Belief that the level of economic activity is determined primarily by aggregate supply</p> Signup and view all the answers

<p>The amount and kind of machinery and equipment available to help a person produce a good or service</p> Signup and view all the answers

<p>Level of output that can be achieved when all resources (land, labor, capital, and entrepreneurial ability) are fully employed</p> Signup and view all the answers

<p>'Demand creates its own supply'</p> Signup and view all the answers

<p>Economists who generally emphasize the importance of aggregate supply in determining the size of the macroeconomy over the long run</p> Signup and view all the answers

<p>Portion of the SRAS curve where GDP is below potential but not so far below as in the Keynesian zone</p> Signup and view all the answers

<p>Portion of the SRAS curve where GDP is far below potential GDP</p> Signup and view all the answers