| Term | Definition |
|---|
| Monetarism | An economic philosophy that assumes inflation occurs when there is too much money chasing too few goods. Suggests that the proper thing for government to do is to have a steady, predictably increase in the money supply at a rate about equal to the growth in the economy’s productivity |
| Keynesianism | Assumes that the market will not automatically operate at a full-employment, low-inflation level. Suggests that the government should intervene to create the right level of demand by pumping more money into the economy (when demand is low) and taking it out (when demand is too great). |
| Economic planning | An economic philosophy that assumes that the government should plan, in varying ways, some part of the country’s economic activity. For instance, in times of high inflation, it suggest hat the government regulate the maximum prices that can be charged and wages that can be paid, at least in the larger industries. |
| Industrial policy | Would have the government planning or subsidizing investments in industries that need to recover or in new industries that could replace them. |
| Supply Side economics | An economic philosophy that holds the sharply cutting taxes will increase the incentive people have to work, save, and invest. Greater investments will lead to more jobs, a more productive economy, and more tax revenues for the government. |
Combine with other sets
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