1. What are the three major questions about which the major schools of macroeconomics differ?
  2. Explain the difference between rational and adaptive expectations?
  3. What is the central policy implication of rational expectations theory?
  4. Use the Aggregate Supply-Aggregate Demand framework to contrast the adjustment process of the economy with adaptive versus rational expectations.
  5. Provide an economic and political critique of New Classical economics.
  6. Explain the Keynesian view of what causes macroeconomic instability.
  7. Explain the Classical-Monetarist view of what causes macroeconomic instability.
  8. Explain and illustrate the New Classical view of a self-correcting economy,
  9. Explain the Keynesian-based mainstream view of a self-correcting economy.
  10. Contrast the Monetarist versus New Classical views on the speed of adjustment of the economy.
  11. For the Monetarists, why does the enactment of a monetary rule make the most sense? Illustrate the Monetarists’ rationale for a monetary rule.
  12. Why do New Classical rational expectations economists also support a monetary rule?
  13. Provide the Keynesian defense of discretionary monetary policy.
  14. Provide the Keynesian defense of discretionary fiscal policy.
  15. Explain and illustrate “crowding out.”
  16. Summarize the Keynesian versus Monetarist views on the size of the crowding out effect and their policy implications.
  17. Why do Keynesian-based economists oppose a balanced budget rule?
  18. Summarize the Supply-side view of rules versus discretion.
  19. On what issues do the warring schools of macroeconomics converge?

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