Answer the following questions.
Question 1) Compare the classical and Keynesian views of aggregate supply curve.
Question 2) Contrast the classical and Keynesian views of stability of the aggregate demand curve.
Question 3) Write down two reasons for macroeconomic instability according to mainstream economists.
Question 4) Describe the equation of exchange.
Question 5) Write down the single most significant cause of macroeconomic instability according to the monetarists.
Question 6) Describe the major reasons for macro economic instability according to the real-business-cycle theory.
Question 7) Construct an example to demonstrate a coordination failure.
Question 8) Describe the view of self-correction held by mainstream economists.
Question 9) Write down three reasons why higher wage could result in greater efficiency.
Question 10) Describe how insider-outsider relationships contribute to downward wage inflexibility.
Question 11) Explain the monetary rule and describe why monetarists prefer it to discretionary monetary policy.
Question 12) Compare the views of mainstream economists with monetarists and RET economists regarding use of discretionary fiscal policy and need for an annually balanced budget.
Question 13) Compare and contrast Taylor Rule with Monetary Rule advocated by monetarists.