Quiz 1 - Macro business cycles economic growth Classical Theory business cycles are temp self-correcting No govt interaction Flex wages prices Keynesian

Quiz 1 - Macro business cycles economic growth Classical...

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Macro - business cycles, economic growth Classical Theory - business cycles are temp & self-correcting. No gov’t interaction. Flex wages & prices. Keynesian Theory - business cycles are not self correcting, needs gov’t interaction Fiscal Policy - G , T Monetary Policy - Ms, r Land - all natural resources used, coal, oil, timber, etc Labor - all mental and physical capabilities of humans Capital - all man made items used in production Adam Smith (1776) - “invisible hand” - interaction of buyers and sellers determine prices

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