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please discuss with the class what are the frameworks economists can use to analyze the macro...

please discuss with the class what are the frameworks economists can use to analyze the macro economy? and what are the policy tools governments can use to manage the macro economy?

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Answer #1

FRAMEWORK

In macroeconomics, we use the theories of aggregate demand (AD) and aggregate supply (AS). There are two perspectives on macroeconomics: the Neoclassical perspective and the Keynesian perspective, each of which has its own version of AD and AS.

POLICY TOOLS

National governments have two tools for influencing the macroeconomy. The first is monetary policy, which involves managing the money supply and interest rates. The second is fiscal policy, which involves changes in government spending/purchases and taxes.

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