Exogenous expectations are not explained within the model but are simply taken as given.

Extrapolative expectations assume that the future is an extension of the recent past.

With rational expectations, people guess the future correctly on average.

New Classical Macroeconomics is based on the twin principles of rapid market clearing and rational expectations.

Gradualist monetarists believe that full employment is restored within a few years, so the main effect of higher money is simply higher prices.

Moderate Keynesians believe that the economy will eventually return to full employment, but that wage and price adjustment is fairly sluggish so the process could take many years.

Extreme Keynesians not only insist that markets fail to clear in the short run: they also believe that markets do not clear in the long run.