1. A neoclassical economist and a Keynesian economist are studying the economy of Vineland. It appears that Vineland is beginning to experience a mild recession with a decrease in aggregate demand. Which of these two economists would likely advocate that the government of Vineland take active measures to reverse this decline in aggregate demand? Why?

2. Do neoclassical economists tend to focus more on long term economic growth or on recessions? Explain briefly.

3. Do you think the Phillips curve is a useful tool for analyzing the economy today? Why or why not?

4. Use table below to answer the following questions. required to draw a Aggregate Demand Aggregate Supply graph on this problem using the data provided in Table 9.4. Your graph will need to identify an equilibrium. For parts c. and d. you can add two more AD curves to your graph. Adding the curves will make it easier to answer the questions that go with your graph.

Price Level	Aggregate Supply	Aggregate Demand
90	3,000	3,500
95	3,000	3,000
100	3,000	2,500
105	3,000	2,200
110	3,000	2,100

1. Sketch an aggregate supply and aggregate demand diagram.
2. What is the equilibrium output and price level?
3. If aggregate demand shifts right, what is equilibrium output?
4. If aggregate demand shifts left, what is equilibrium output?
5. In this scenario, would you suggest using aggregate demand to alter the level of output or to control any inflationary increases in the price level?