203 Discussion Topic: Keynesian vs. Neoclassical Economics

Thinking back to the business cycle discussion, how would Keynesian economists explain the performance of the economy during the last few years? Show graphically using the AD/AS model, and explain your reasoning.

Next, how would neoclassical economists explain the performance of the economy during the last few years? Show graphically using the AD/AS model, and explain your reasoning.

Which interpretation makes the most sense to you? Why?

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