2. According to classical economists, does Say's Law hold in a money economy? Explain your answer.

4. Explain why saving rises as the interest rate rises.

6. What does it mean to say that the economy is in a recessionary gap? In an inflationary gap? In long-run equilibrium?

8. Describe the relationship of the (actual) unemployment rate to the natural unemployment rate in each of the following economic states:

(a) arecessionarygap:

(b) aninflationarygap:_

(c) long-runequilibrium.: