Economics 251 Test 4 Essay 30 pt ANSWER - JESSIE ZAMUDIO Write a three-paragraph essay(Each paragraph is worth 10 points In the first paragraph compare

Economics 251 Test 4 Essay 30 pt ANSWER - JESSIE ZAMUDIO...

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JESSIE ZAMUDIOWrite a three-paragraph essay. (Each paragraph is worth 10 points).In the first paragraph, compare and contrast the Classical Theory and the Keynesian Theory about the Macro Economy. What did each believe to be true? What did they each believe would happen if a recession occurred? What did they each believe would take place if an inflationary period occurred? In the second paragraph describe what Fiscal Policy is? How did Keynes want to use it during a recession? How would Fiscal Policy be used during inflation? Who would administer this policy? How?What are your views of Keynesian Theory? Why do you feel this way?Let us first begin about the Classical Theory and some of the things it believed to be true. The classical theory stated that the economy is inherently stable and if you let it be it self-adjust.In addition, the Classical theory states that prices are flexible and go up and down. During a recession the theory suggested that prices will go down and consumers will purchase more,

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