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MacroEcon Ch13 - NeoClassical Perspective

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the theory that people form the most accurate possible expectations about the future that they can, using all information available to them.

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Terms in this set (5)

the theory that people form the most accurate possible expectations about the future that they can, using all information available to them.

rational expectations.

the amount and kind of machinery and equipment available to help a person produce a good or service.

physical capital per person.

the philosophy that, in the long run, the business cycle will fluctuate around the potential, or full-employment, level of output.

neoclassical perspective.

a future rate of inflation that consumers and firms build into current decision making.

expected inflation.

the theory that people look at past experience and gradually adapt their beliefs and behavior as circumstances change.

adaptive expectations.