Macroeconomic Schools of Thought Flashcards
1
Q
How do Classical and Keynesian views differ on unemployment?
A
Classical: markets self-correct; unemployment is voluntary.
Keynesian: wages are sticky; unemployment can persist without interventio
2
Q
What is the Monetarist position on inflation?
A
“Inflation is always and everywhere a monetary phenomenon” (Friedman); control the money supply to stabilize prices
3
Q
What do New Classical economists emphasize?
A
Rational expectations and policy ineffectiveness in the short run.
4
Q
A
