Question 1: Provide one example to elaborate what you understand from the following statement: "The classical model focuses on the long-run outcomes while the Keynesian model focuses on the short-run outcomes. They are complementary: NOT contradictory; you can apply any lessons you learnt from the example we discussed in class regarding the impact of deficit financing on unemployment. No diagrams are necessary for answering this question.
Question 2: A New Zealand politician argued that "if expansionary fiscal policies during recessions are not matched by fiscal contractions during recovery, then the public debt to GDP ratio will grow and the share of private investment in GDP will decline; provide a justification for this argument.
Question 3: Provide an explanation in your words why the differences in education policies between two countries may explain why we observe higher income inequality in one country but not in the other country. No supportive diagrams are necessary.
Question 4: Provide one brief explanation for a sharp increase in unemployment, despite the availability of the advanced online communication technology, following the lockdown related to the sudden outbreak of the COVID pandemic around the world.