According to the lectures, which of the following ideas are representative of (neo)classical (orthodox) theory, which are representative of (post)Keynesian (heterodox) theory, and which are shared by both theories? The loanable funds market Capitalist economies will normally fail to reach full employment due to insufficient aggregate demand Investment and savings are primarily functions of the rate of interest Savings equals investment in equilibrium (ignoring government or foreign sector) Capitalist economies tend to full employment, at least in the long run The paradox of thrift Demand, particularly intended investment, drives supply "In the long run, we're all dead" Interest rates fall when money saved exceeds the demand for those funds for investment, until savings equals investment Output, income, and employment fall when money saved exceeds intended investment, until savings equals investment Saving is a leakage out of, and investment is an injection into, the spending flow In equilibrium, aggregate demand (total planned spending) must equal output and income Supply creates its own demand 1.(neo)classical2.(post)Keynesian3.Both

* ANSWER :- from the above information the answer is provided as follows

Answered: According to the lectures, which of the…

According to the lectures, which of the following ideas are representative of (neo)classical (orthodox) theory, which are representative of (post)Keynesian (heterodox) theory

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter15: Macroeconomic Viewpoints: New Keynesian, Monetarist, And New Classical

Section: Chapter Questions

Problem 5E

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Question

According to the lectures, which of the following ideas are representative of (neo)classical (orthodox) theory, which are representative of (post)Keynesian (heterodox) theory, and which are shared by both theories?

	The loanable funds market
	Capitalist economies will normally fail to reach full employment due to insufficient aggregate demand
	Investment and savings are primarily functions of the rate of interest
	Savings equals investment in equilibrium (ignoring government or foreign sector)
	Capitalist economies tend to full employment, at least in the long run
	The paradox of thrift
	Demand, particularly intended investment, drives supply
	"In the long run, we're all dead"
	Interest rates fall when money saved exceeds the demand for those funds for investment, until savings equals investment
	Output, income, and employment fall when money saved exceeds intended investment, until savings equals investment
	Saving is a leakage out of, and investment is an injection into, the spending flow
	In equilibrium, aggregate demand (total planned spending) must equal output and income
	Supply creates its own demand

1.	(neo)classical
2.	(post)Keynesian
3.	Both

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