Q4. How would you contrast and compare the various approaches to dealing with cyclical unemployment by Keynesian and neoclassical economics?

• Neoclassicals would suggest tax increases that stimulate productivity growth and labor demand. Keynesians would suggest increasing government spending.
• Both would suggest an increase in aggregate supply by increasing government spending.
• Neoclassicals would suggest doing nothing because the labor market will correct itself. Keynesians would suggest an increase in government spending.