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1. "In response to demand shocks, short-term quantity adjustments occur earlier than price adjustment at the level of both the ?rm and the economy." Discuss the relevant theory behind this statement. Also, discuss its empirical validity at the macroeconomic level.
2. Discuss in the context of the effective demand and Phillips curve Keynesian models: excluding dynamic effects, an increase in the stock of money and a fall in nominal wages have essentially the same effects at a time of involuntary unemployment.
3. Discuss in the context of the neo- and new Keynesian models: excluding dynamic effects, an increase in the stock of money and a fall in nominal wages have essentially the same effects at a time of involuntary unemployment.
be sure to explain your answers completely and show you read each article and thought about what it said.question1
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