1. What is the purpose of the AD/AS model, and how are the
Keynesian and neoclassical perspectives different?
2. Explain how it is possible for one economist to accept both
the Keynesian and neoclassical perspectives.
3. Explain how we can model the collapse of the housing market
in the AD/AS model. Hints: When the bubble burst and wealth fell so
rapidly, what curve will shift? When that curve shifts, what does
that predict will happen to unemployment, inflation, and GDP?