Macroeconomics

Macroeconomics - Key Terms

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Key Terms self-regulating economy:  an  economy  in which problems such as  unemployment  are resolved without government  intervention, through the working of the  invisible hand , and in which government attempts to improve the economy’s  performance would be ineffective at best, and would probably make things worse. Keynesian economics:  a school of thought emerging out of the works of John Maynard Keynes; according to  Keynesian economics, a depressed  economy  is the result of inadequate spending and government intervention can  help a depressed economy through  monetary policy  and fiscal policy. monetary policy:  changes in the quantity of money in circulation designed to alter  interest rates  and affect the level  of overall spending fiscal policy:  changes in government spending and taxes designed to affect overall spending.
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