Can you categorize the following into the different places in the chart?

• Classical
• Keynesian
• Monetarist
• Supply-side
• Rational Expectations

Question 1: Does the economy go to full employment automatically? Yes, the economy Yes, in the Ion g-run Yes, if government No. The economy moves to full because people are doesn't have too Yes, if government can be in equilibrium employment in the rational and will take many regulations and stays out of the way way below full long n.|n appropriate actions taxes employment School of Thought? Question 2: Recession cure? Encourage sayings Let wages fall due to through IRAs, tax cuts Continue to increase Decit spend or cut labor competition; and reducing the money supply at taxes or both employers will hire regulations on a constant rate more of the cheaper businesses labor The only policy is an unexpected change School of Thought? Question 3: Inflation cause? Too much regulation Too much AD or too of business, too little Statement Free Square! Outside Shocks Too much money in little AS savings, and no AS the economy growth School of Thought? Question 4: Inflation cure? Less regulation, more Reduce AD by Patience . . . and a Only a surprise savings, less Statement increasing taxes or Patience constant increase in change will have any government spending decreasing spending money supply of 3% impact and less taxes to grow AS School of Thought?Question 5: Best known advocate? Milton Friedman George Gilder and John Maynard Keynes Adam Smith John Muth and Robert Lucas Ronald Reagan Statement School of Thought? Question 6: Key Graph or Equation? Laffer Curve ???? Savings = Investment MV=PQ Aggregate Expenditures Model Statement School of Thought? Question 7: Favorite Quotation? "Policymakers? We "Government is not TINSTAAFL "There is "In the long run we're the answer; Statement don't need no stinking "Supply creates its no such thing as a policymakers!" own demand!" all dead!" government is the free lunch." problem!" School of Thought