DP Economics Questionbank

Examine why, in contrast to the monetarist/new classical model, the economy will not automatically return to the full employment level of output in the Keynesian model.

Calculate the total welfare loss resulting from the imposition of the tariff on chia seeds.

Using the monetarist/new classical model and the Keynesian model, discuss the view that increases in aggregate demand will inevitably be inflationary.

Explain how a deflationary gap might occur.