1. A. Define procyclical and countercyclical. Give any one example for each. (3

marks)

B. Describe how Keynesian economics is a cyclical phenomenon. Is it leading,

lagging, or coincident? procyclical or counter cyclical? (3 marks)

2. A. Why did the labour supply has positive relation with real wage (positive slop)

as visualized by classical economist? (3 marks)

B. Differentiate the reasons for change in investment as visualized by classical

economist from new-Keynesian economist. (3 marks)