Write a well constructed double spaced 12 point Times New Roman or Courier New font 4 or 5 page typed essay on the topic below. Go step by step through the topic, and make sure you address all of the questions presented in order. Draw your AD-AS graph legibly on a separate (5th or 6th) page, and label it perfectly. To draft your essay, outline your response first. Write a first draft. Describe the topic and your response to someone else, and inquire about whether it makes sense and flows well. Edit your first draft, taking into account your reviewer's comments. Edit your second draft for grammatical errors, reading from the last sentence up to the first.
Final Exam Essay Topic:
Consider a state of the national economy in which actual output is less than the economy's full employment level of output. Draw an AD-AS graph reflecting such a condition. Is this short run equilibrium sustainable? Why or why not? What policy initiatives would Hayek and Keynes have suggested that national planners implement to cure such a condition. Describe the economic self correcting mechanisms which will direct the economy toward a long run equilibrium. Describe some of the fiscal, monetary and structural policy initiatives national planners might employ to direct the economy toward a long run equilibrium. Add to your AD-AS graph to reflect the effects of such a correction, and identify the eventual long run equilibrium. If national planners were to implement a successful structural policy change which removed legal constraints on technological innovation, what would the expected long run effects be? Add to your AD-AS graph to reflect the effects of such a change.