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Measure Inflation Expectations

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

Why and how do economists measure inflation expectations? People take expectations about inflation into consideration every time they make a major purchase, such as a house or a car. As inflation fluctuates, so too does the nominal interest rate on loans to buy these...

Government Spending – Explained

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is Government Spending? Government spending covers a range of services that the federal, state, and local governments provide. What is a Budget Deficit and Surplus? When the federal government spends more money than it receives in taxes in a given year, it runs a...

Neoclassical Phillips Curve Tradeoff

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What is the Neoclassical Phillips Curve Tradeoff? The short run upward sloping aggregate supply curve implies a downward sloping Phillips curve; thus, there is a tradeoff between inflation and unemployment in the short run. By contrast, a neoclassical long-run...

NeoClassical and Keynesian View of Long-Run Aggregate Supply and Demand

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What are the NeoClassical and Keynesian View of Long-Run Aggregate Supply and Demand? The aggregate demand and aggregate supply diagram shows two aggregate supply curves. We draw the original upward sloping aggregate supply curve (SRAS0) is a short-run or Keynesian AS...

Keynesian vs Neoclassical Macroeconomic Policy Recommendations

by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy

What are Keynesian vs Neoclassical Macroeconomic Policy Recommendations? Let’s summarize what neoclassical economists recommend for macroeconomic policy. Neoclassical economists do not believe in “fine tuning” the economy. They believe that a stable economic...
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