1213 Grade 12 Economics Concept List Periodic T2 Wk11

Price adjustments arenotthat easydueto longterm wage

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Unformatted text preview: economy get corrected automatically. Markets can regulate themselves. Govt intervention is essential to growth and stability. Using fiscal policy is the most effective way the government can give a helping hand. Flexible prices and wages (all rewards from F.O.P are flexible), markets work freely, no long business cycles exist as the economy adjusts very quickly back to equilibrium. No fiscal policy needs to be used because AS curve is vertical at full employment and any increase in AD will only cause inflation. Fiscal policy is useless as it creates crowding out. Adam smith David Ricardo Thomas‐ Malthus John Stuart Mill Willaim Petty Johann‐Heinrich Von‐Thunen Keynesians John Maynard Keynes “In the long run we are all dead” Sticky downwards, would go...
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