1. Not a quiz today, but if you had to choose
one reality when you are 40:
A. Be really famous
B. Be really wealthy
C. Have a comfortable lifestyle
D. Have a large stable family
E. Have a rewarding career

2. 1. Why does the SRAS curve slope upward?
2. Better question, why it tougher to move than
the SRAD?

3. Keynes: Labor wages tend to stay at their current
levels
Classical: doesn’t happen in long run, flexible wages
adjust
Cyclical unemp.
Flexibility = employment
Housing market?

4. Keynes: firm’s prices tend to stay at their current
levels
Classical: doesn’t happen in long run, deflation

5. Keynes: firm’s misjudge economic changes and
misstate prices
Classical: doesn’t happen in long run, flexible prices
adjust

7. Pages 754-755
#1 A-C
#2 A-D
#9 A-C

8.  Poster explaining active Keynesian stabilization
policies pages 773-778
• Pictures, maybe a graph, explanation of stabilizers,
multiplier effect
 Mankiw, Ch34 Problems: 4, 5, 7, 9, 10, 13
 Find 4 + bloggers discussing fiscal spending, cite
the source and evaluate their ideas (what is their
view of the spending multiplier, agree/disagree
& why). (Mises.org, planet money,
lewrockwell.com, marginal revolution, Mankiw,
Krugman,WSJ, Café Hayek)