Objectives: To understand:

  • Aggregate Demand in Keynesian Analysis
  • The Phillips Curve
  • The Keynesian Perspective on Market Forces
  • The Basics of Neoclassical Analysis
  • Policy Implications of the Neoclassical Perspective

To-Do Before Class

Read Ch. 12 Introduction to the Keynesian Perspective

Ch. 13 Introduction to the Neoclassical Perspective 

Activities/Assignments

  • Apply Your Knowledge

Review: Ch. 12 Key Concepts & Summary and Ch. 13 Key Concepts & Summary 

Answer: Ch. 12 Critical Thinking Question #23; Ch. 13 Review Question #9; Ch. 13 Problem #21

Economics in the Real World

Example 1:

Biden Administration Will Begin Disbursing $350 Billion in State and Local Aid

Discussion

Part of the coronavirus stimulus bill signed into law in March 2021 will include aid to state and local governments that experienced extensive losses in tax revenue during the pandemic. Does this policy reflect an example of Neoclassical or Keynesian economic policy?

Provide a clearly detailed explanation for your answer.

Example 2:

During Covid-19, Most Americans Got Richerā€”Especially the Rich

Discussion

In what ways was the pandemic-related economic downturn not typical of most recessions? What trends were different?