. Explain the difference in vision of the Classical macrocconomists and the Keyn

Question

. Explain the difference in vision of the Classical macrocconomists and the Keynesian macrocconomists 2. What is the space of classical aggregate equilibrium and how docs it relate to the complete classical model? Be sure to show the graph). 3. Describe the three curves that describe the AD AS model and show long run aggregate equilibrium in a graph 4. Describe and show the AD curve. Include the reasons it slopes downward 5. Explain the counteracting forces that act against the reasons for a downward sloping AD curve. 6. Describe and show the shift factors for the AD curve. Show how each relate to both increases and a decreases in AD 7. Describe and show the SAS curve. Why is it upward sloping? Be sure to explain the two different kind of markets. 8. Describe and show the shift factors in the SAS curve? Include how each relate to both increases and a decreases in SAS 9. Describe and show the LAS curve. Include is what level of output is associated witlh 10. Esplain what is meant by the range of potental output when combining the SAS and LAS cunes Be sure to draw the graph. What happens to the SAS output? Be sure to ep curve when we ar at high level of potential ourput? At low levels of potentia output Be sure to explain and show why the shifs may occur in the various directions 11. Describe and show aggregate equilibrium in the short run including the graph 12. Describe and show what happens to equilibrium when AD changes (both increase and decrease, be sure to give at least one reason for the shift) 13. Describe and show what happens to equilbrium when SAS changes (both increase and decrease, be sure to give at least one reason for the shift) 14. Describe and show long run aggregate equilibrium. Identify a recessionary gap and an inflationary gap and reasons why the economy is in chem Describe and show how each gap is eliminated

Explanation / Answer

For these questions I can refer you n ideal text book. The best would be Dornbusch, Fischer and Startz. You can also use macro theory by N Gregory Mankiw. There is also another higher level textbook by Hjidra and Van der Ploeg. These texts should be sufficient to answer all the questions above.

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