Keynesian & Monetarist view - Urgent Help Required!?

Question

I've 2 questions. Can anyone help me out please. I've my exam on monday (am).

1) Draw a diagram showing the Keynesian view of aggregate demand and aggregate supply in the economy. Explain your diagram clearly. What effect would a rise in aggregate demand have on output and price levels in the economy?

2) Draw a diagram showing the Monetarist view of aggregate demand and aggregate supply in the economy. Explain your diagram clearly. What effect would a rise in aggregate demand have on output and price levels in the economy?

Your help will be appreciated!

Answer 1

Yeah...this one is hard. I don;t know how to upload diagrams here, so anyone's help will be limited. There is a website I use in my macroeconomics class called reffonomics.com that functions as a virtual economic textbook.

The key difference is in the shape of the Aggregate supply curves, the Keynesian one is horizontal m then upward, then vertical. The moneterist has two, one upward sloping for short-ru, one vertical for long run.

Hope you can take it from there.

Answer 2

You should have paid more attention in class.