1. Since the long run AS curve is vertical, we can conclude

that the total output of a nation cannot grow in the very

long run. Comment on whether you agree with this

statement.

2. Very long run growth can best be studied by focusing on

the reasons for business cycles. Comment on this

statement.

3. What are the likely consequences for output and inflation

in the short run if there is an increase in aggregate

demand. You must explain the reasons for your answer.