TEAM PROJECT #2: Each team is to research your own Team THEORY Name. That is Classicals, Keynesians, Monetariest, Rationals, etc. Post a clear, simple to understand explanation of what each philosophy is about. Don't get too technical so others don't know what it means. Focus of a FEW MAJOR forces that pertain to ECONOMICS. Leave it at that! Also the key individual that is identified with each theory. LEARN & have FUN! DUE: MARCH 28TH, THURSDAY BY CLASS TIME.

-- Anonymous, March 14, 2002

Answers

Mahalo Vera! It was a fun day! :)

-- Anonymous, March 20, 2002

When you see Guy be sure to wish him a Happy 50th Birthday!

-- Anonymous, March 20, 2002

Monetarism, a term set by a conservative economist named Milton Friedman, is a way of economic thought, where the money supply is the major influential factor of economic activity. This means that if the money supply is growing, the economy will grow, and if money-supply growth is accelerating, so will economic growth. In addition, Monetary Policy is the economic principles and programs adopted by the government that manage the growth of its money supply, the availability of credit, and interest rates. In the United States, the Federal Reserve Board determines monetary policy. Monetarists are the ones that advocate the regulation of the money supply as a means of controlling and stabilizing the economy.

-- Anonymous, March 27, 2002

The Rational expectations theory was developed in the 1970's by Robert Lucas. It came about when Lucas began to question the short run tradeoff between inflation and unemployment. The theory is that expectations that people form are based on past experience and also on their predictions about the effects of present and future policy and events. In short, what is expected is based on the past, present, and future, and one in which people anticipate policies.

-- Anonymous, April 01, 2002

The main man of the Classical theory is Alan Smith with his book The Wealth of Nations. There are three main characteristics of the Classical theory: Free market, Say’s law, and Quantity Theory of Money. Free market can be described by Laissez Faire, and Alan’s theory of the Invisible Hand. Say’s law is another definition of little public sector and heavy private sector. It states simply that supply creates its own demand and the system, if allowed to work on its own will always eventually even out. Quantity Theory of Money uses the Fisher equation of change. Which states: MV=PT. Where M= amount of money in circulation, V=velocity of circulation, P=average price level, and T=number of transactions. Simply put, if you control the money supply then you control the inflation.

-- Anonymous, April 01, 2002

Keynesian Theory Keynesian Theory's main man is John Maynard Keynes. The Keynesian theory is democratic. The main points of this theory are it is much like socialism with high government involvement (example- taxes) Fiscal policy pertains to Keynesian economics. Lastly, Keynsians are very wasteful.

-- Anonymous, April 02, 2002