Unit 5

Question 1

Hayek (economic policy)

Answer 1

1. Free market approach
2. wages in long run are flexible

Question 2

Keynes (economic policy)

Answer 2

1. govt should be involved
2. fiscal/monetary policy

Question 3

phillips curve def

Answer 3

shows the tradeoff between inflation and unemployment

Question 4

why is the long run phillips curve vertical?

Answer 4

in the long run, there is no tradeoff between inflation and unemployment

Question 5

govt policies that result in long-run growth (3)

Answer 5

1. education/training
2. infrastructure spending
3. production/investment incentive

Question 6

supply side fiscal policy

Answer 6

govt policies designed to increase production