Questions:
1. Use shifts of the AD and AS curves to explain the cost-push inflation of the 1970s.
2. What is the mathematical term to describe the relationship between real consumption and real GDP?
3. What is the mathematical term to describe the relationship between real saving and real GDP?
4.What happens to the value of the APC as real GDP decreases?
5.What happens to the value of the APS as real GDP decreases?
6.APC + APS = MPC + MPS: TRUE OR FALSE?
7.Briefly summarize Say's Law.
8.Briefly summarize the Classical view of how the economy works.
9.What historical event caused a change in thinking about the way the economy works?
10.Briefly summarize the Keynesian view of how the economy works.
11.What is the difference between the investment demand curve for a business and the investment schedule for an economy?
12.What is the difference between the equilibrium level of real GDP and the full-employment level of real GDP in the Keynesian model?