Short Answer Question
The economy of Packerland has the following economic conditions:
Inflation 2% and steady
Unemployment 5% and rising
• Real GDP growth - 4% and falling
Answer the following questions:
1. If you were a classical economist what would be your solution and how would it work? In other words,
step-by-step how would the economy change to fix those numbers?
2. If you were a Keynesian economist what would be your solution and how would it work? In other words,
step-by-step how would the economy change to fix those numbers?