Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Chapter 12, Problem 2AP
To determine
Comparative study of
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Explain why classical assumptions are not realistic?
How do Classical economists and Keynesian economists differ in their perceptions of how well markets and prices function?
List and briefly explain the nature and functions of three market arenas.
Which are the four components of the macroeconomy? Explain the interaction between these components through a circular flow diagram.
Draw a graph of a business cycle. Label and explain each phase of the business cycle.
Define the following concepts:
Sticky Prices
Expansion and contraction
Inflation, Deflation and Hyperinflation
Fiscal Policy and Monetary Policy
Elaborate on how one or more of the microeconomic components, namely consumption, investment, supply and demand for money influence macroeconomic outcomes and formulations of the following macroeconomic theories:
Solow Growth Model
The Mundell-Fleming model
Neoclassical Model of Investment
Use mathematical equations and graphs where necessary.
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