1. Compare and contrast the short-run and long-run AS curves for both the Classical and Keynesian models. Include in your explanation WHY the AS curves look different in the two different theories.
2. Suppose a war causes a sudden, large increase in government spending.
(a) What happens to both prices and GDP in the short-run Classical Model? Do they increase decrease or stay the same? Explain.
(b) What happens to both prices and GDP in the short-run Keynesian model? Do they increase decrease or stay the same? Explain