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- Summarize the Keynesian and Neoclassical models.1. The traditional economic (the Neoclassical view) approach to behavior suggests that: A. employees will always want to do a good job. B. managers may or may not assume that individuals are happy in the workplace. C. managers should assume that employees are there only for a paycheck. D. managers can motivate desired behavior by establishing appropriate incentives. E. all the above.“In the 1980s, the political dominance of conservative governments in the United States, Canada,Britain, and West Germany came with a neoclassical counterrevolution in economic theory andpolicy”. (Todaro & Smith, 2020: 133)Explain the neoclassical counterrevolution. In your answer:• Discuss the concept of a ‘market failure’.
- Pick 1 answer. 4. Summarize the Neoclassical model: A. The neoclassical model is built on the importance of aggregate demand as a cause of business cycles and a degree of wage and price rigidity, and thus does a sound job of explaining many recessions and why cyclical unemplovment rises and falls. B. The neoclassical model emphasizes aggregate supply by focusing on the underlying determinants of output and employment in markets, and thus tends to put more emphasis on economic growth and how labor markets work c. The neoclassical model emphasizes aggregate demand by focusing on the underlying determinants of output and employment in markets, but tends to but less emphasis on economic growth and how labor markets work. 9.Would it make sense to argue that rational expectations economics is an extreme version of neoclassical economics? Explain.Legislation proposes that the government should use macroeconomic policy to achieve an unemployment rate of zero percent, by increasing aggregate demand for as much and as long as necessary to accomplish this goal. From a neoclassical perspective, how bill this policy affect output and the price level in the short nm and in the long run? Sketch an aggregate demand/aggregate supply diagram to illustrate your answer. Hint revisit Figure 26.4.
- Do neoclassical economists tend to focus more on cyclical unemployment or on inflation? Explain briefly.Does neoclassical economics view prices and wages as sticky or flexible? Why?Explain what is meant by ‘macroeconomics’ and why some economists think that it is different to standard neoclassical economics. explain with graphs please.
- Comparing neoclassical theory to Keynesian theory, it is safe to say that a. neoclassical theory places more emphasis on the government to solve problems while the Keynesian theory places more emphasis on the market to solve problems b. neoclassical theory place is more emphasis on the market system to solve problems the Keynesian  places more emphasis on the government to solve problems c. Neoclassical theory and Keynesian theory both agree the government must be involved in the economy to get full employment  d. None of the above4.What is meant by the term neoclassical counterrevo-lution? What are its principal arguments, and how valid do you think they are? Explain your answer.Write a word defense of either the Keynesian perspective or the Neoclassical perspective of economics. Which worldview makes the most sense? You are encouraged to relate your explanation to specific examples, politics, the fashion industry, your own life, etc.