The short-run and of the macro economy

Subjects: Literature, Russian Literature

Info

Published: November 17, 2021
Updated: November 17, 2021
University / College: Harvard University
Level: Masters
Language: English
Downloads: 30

Economics
1. The Short-Run (Keynesian) And Of The Macro Economy
Classical and Keynesian theories are two of the economic school of thought, and each has different approaches to the economic studies that involve monetary policy, government spending and consumer behavior (Arnold 56).
The long run neoclassical theories deal with coming up with solutions for problems in the economy, which are long term and they are mainly developed from the effects of inflation, government restrictions and taxes. They are based on the assumption that there is a free market where no restrictions from the government are present, and they will make use of policies in use currently and determine how new theories will improve or alter the free market environment (Arnold 69). Conversely, Keynesian theory gives focus on immediate outcomes in the economic theory and will focus on short term policies set by the government and how they can be used to improve the economy (Arnold 71). The Keynesian theory is built on the belief that the government will be responsible for the economy and will lay down policies that will put the economy in a favorable state. These will include policies such as monetary and fiscal policies, which are used to regulate the economy. The neoclassical theory is based on a free market hence the forces of demand and supply shape the economy.
2. Differences between change in quantity demand and shift demand
A change in quantity demanded is generally the increase or decrease in demand that is brought about by a change in price of the product which results to a change in quantity demanded. This implies that the change in the quantity demanded will be altered only because of a change in price whereas shift in demand is caused by other factors other than price. Change in quantity demand involves a movement along the demand curve where as shift in demand involves a shift in the demand curve either to the left or right.
Work Cited
Arnold, Roger A. Macroeconomics. Belmont: Cengage Learning, 2008. Print.

Thank's for Your Vote!

This work, titled "The short-run and of the macro economy" was written and willingly shared by a fellow student. This sample can be utilized as a research and reference resource to aid in the writing of your own work. Any use of the work that does not include an appropriate citation is banned.

If you are the owner of this work and don’t want it to be published on AssignBuster, request its removal.

Request Removal

Cite this Essay

References

AssignBuster. (2021) 'The short-run and of the macro economy'. 17 November.

Reference

AssignBuster. (2021, November 17). The short-run and of the macro economy. Retrieved from https://assignbuster.com/the-short-run-and-of-the-macro-economy/

References

AssignBuster. 2021. "The short-run and of the macro economy." November 17, 2021. https://assignbuster.com/the-short-run-and-of-the-macro-economy/.

1. AssignBuster. "The short-run and of the macro economy." November 17, 2021. https://assignbuster.com/the-short-run-and-of-the-macro-economy/.

Bibliography

AssignBuster. "The short-run and of the macro economy." November 17, 2021. https://assignbuster.com/the-short-run-and-of-the-macro-economy/.

Work Cited

"The short-run and of the macro economy." AssignBuster, 17 Nov. 2021, assignbuster.com/the-short-run-and-of-the-macro-economy/.

Get in Touch

Please, let us know if you have any ideas on improving The short-run and of the macro economy, or our service. We will be happy to hear what you think: [email protected]