The Keynesian Perspective (Economics)

Recall cards on the Keynesian perspective in macroeconomics. Aggregate demand in Keynesian analysis: consumption, investment, government spending, and net exports, and what determines each. The two building blocks of Keynesian analysis: aggregate demand determines output and employment, and wages and prices are sticky (the coordination argument, menu costs, macroeconomic externality, recessionary and inflationary gaps, and the expenditure multiplier). The Phillips curve and the short-run tradeoff between inflation and unemployment, why it shifts, and expansionary versus contractionary fiscal policy. The Keynesian perspective on market forces, its policy prescription, and its limitations.