{"id":2407,"date":"2015-06-30T21:50:32","date_gmt":"2015-06-30T21:50:32","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterymacro1xngcxmaster\/?post_type=chapter&p=2407"},"modified":"2015-07-12T04:13:29","modified_gmt":"2015-07-12T04:13:29","slug":"glossary-keynesian-and-neoclassical-economics","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-hccc-macroeconomics\/chapter\/glossary-keynesian-and-neoclassical-economics\/","title":{"raw":"Glossary: Keynesian and Neoclassical Economics","rendered":"Glossary: Keynesian and Neoclassical Economics"},"content":{"raw":"

The Keynesian Perspective<\/h2>\r\n
\r\n
contractionary fiscal policy<\/dt>\r\n
tax increases or cuts in government spending designed to decrease aggregate demand and reduce inflationary pressures<\/dd>\r\n
coordination argument<\/dt>\r\n
downward wage and price flexibility requires perfect information about the level of lower compensation acceptable to other laborers and market participants<\/dd>\r\n
disposable income<\/dt>\r\n
income after taxes<\/dd>\r\n
expansionary fiscal policy<\/dt>\r\n
tax cuts or increases in government spending designed to stimulate aggregate demand and move the economy out of recession<\/dd>\r\n
expenditure multiplier<\/dt>\r\n
Keynesian concept that asserts that a change in autonomous spending causes a more than proportionate change in real GDP<\/dd>\r\n
inflationary gap<\/dt>\r\n
equilibrium at a level of output above potential GDP<\/dd>\r\n
macroeconomic externality<\/dt>\r\n
what occurs at the macro level is different from the sum of what happens at the micro level; an example would be where upward-sloping market supply curves become a flat aggregate supply curve<\/dd>\r\n
menu costs<\/dt>\r\n
costs firms face in changing prices<\/dd>\r\n
Phillips curve<\/dt>\r\n
the tradeoff between unemployment and inflation<\/dd>\r\n
real GDP<\/dt>\r\n
the amount of goods and services actually being sold in a nation<\/dd>\r\n
recessionary gap<\/dt>\r\n
equilibrium at a level of output below potential GDP<\/dd>\r\n
sticky wages and prices<\/dt>\r\n
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<\/dd>\r\n<\/dl>\r\n

The Neoclassical Perspective<\/h2>\r\n
\r\n
adaptive expectations<\/dt>\r\n
the theory that people look at past experience and gradually adapt their beliefs and behavior as circumstances change<\/dd>\r\n
expected inflation<\/dt>\r\n
a future rate of inflation that consumers and firms build into current decision making<\/dd>\r\n
neoclassical perspective<\/dt>\r\n
the philosophy that, in the long run, the business cycle will fluctuate around the potential, or full-employment, level of output<\/dd>\r\n
physical capital per person<\/dt>\r\n
the amount and kind of machinery and equipment available to help a person produce a good or service<\/dd>\r\n
rational expectations<\/dt>\r\n
the theory that people form the most accurate possible expectations about the future that they can, using all information available to them<\/dd>\r\n<\/dl>\r\n","rendered":"

The Keynesian Perspective<\/h2>\n
\n
contractionary fiscal policy<\/dt>\n
tax increases or cuts in government spending designed to decrease aggregate demand and reduce inflationary pressures<\/dd>\n
coordination argument<\/dt>\n
downward wage and price flexibility requires perfect information about the level of lower compensation acceptable to other laborers and market participants<\/dd>\n
disposable income<\/dt>\n
income after taxes<\/dd>\n
expansionary fiscal policy<\/dt>\n
tax cuts or increases in government spending designed to stimulate aggregate demand and move the economy out of recession<\/dd>\n
expenditure multiplier<\/dt>\n
Keynesian concept that asserts that a change in autonomous spending causes a more than proportionate change in real GDP<\/dd>\n
inflationary gap<\/dt>\n
equilibrium at a level of output above potential GDP<\/dd>\n
macroeconomic externality<\/dt>\n
what occurs at the macro level is different from the sum of what happens at the micro level; an example would be where upward-sloping market supply curves become a flat aggregate supply curve<\/dd>\n
menu costs<\/dt>\n
costs firms face in changing prices<\/dd>\n
Phillips curve<\/dt>\n
the tradeoff between unemployment and inflation<\/dd>\n
real GDP<\/dt>\n
the amount of goods and services actually being sold in a nation<\/dd>\n
recessionary gap<\/dt>\n
equilibrium at a level of output below potential GDP<\/dd>\n
sticky wages and prices<\/dt>\n
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<\/dd>\n<\/dl>\n

The Neoclassical Perspective<\/h2>\n
\n
adaptive expectations<\/dt>\n
the theory that people look at past experience and gradually adapt their beliefs and behavior as circumstances change<\/dd>\n
expected inflation<\/dt>\n
a future rate of inflation that consumers and firms build into current decision making<\/dd>\n
neoclassical perspective<\/dt>\n
the philosophy that, in the long run, the business cycle will fluctuate around the potential, or full-employment, level of output<\/dd>\n
physical capital per person<\/dt>\n
the amount and kind of machinery and equipment available to help a person produce a good or service<\/dd>\n
rational expectations<\/dt>\n
the theory that people form the most accurate possible expectations about the future that they can, using all information available to them<\/dd>\n<\/dl>\n\n\t\t\t
\n\t\t\t

Candela Citations<\/h3>\n\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t
CC licensed content, Shared previously<\/div>