Explain the concept at hand and answer the question with supporting reasoning.

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?

When the economy is experiencing a recession, why would a neoclassical economist be unlikely to argue for aggressive policy to stimulate Aggregate Demand and return the economy to full employment? Explain your answer.

Explain why neoclassical economists believe that the government does not need to do much about unemployment. Do you agree or disagree? Explain.

What are the four functions that money serves?

How do banks create money?

Should banks have to hold 100% of their deposits? Why or why not?

Mathematical Questions

What is the formula for the money multiplier?