Write an essay that is less than five pages using a standard font, a standard font size, standard margins, and double-spacing.
In your essay, demonstrate both an understanding of the IS-LM model and the labor market with price information asymmetries.
a) Consider the recommended use of monetary policy according to Neo-Keynesian Macro and Monetarist Macro. Specifically, under what situation do Neo-Keynesians recommend The FED increase the monetary base? Under what situation do Monetarists recommend The FED increase the monetary base? Summarize the differences in Neo-Keynesian and Monetarist demand-side theories that underlie the different policy recommendations.
b) How do the Neo-Keynesian and Monetarist monetary policy recommendations relate to the Classical Doctrine of Full Employment and the Classical Quantity Theory of Money.
c) Summarize the effects of an increase in the monetary base in the New Classical Macro perspective.
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