Question

1. Name and explain the two schools of thought in macroeconomics.



2. Why is specialization and the division of labor important to economic growth?


3. How do you define " per capita growth"?





4. Discuss two sources of economic growth.

5. What role does comparative advantage play in international trade?


6. Name three sources of U.S. comparative advantage.



7. What effect does currency depreciation/appreciation have on that country's exports?

Answer 1

As per HOMEWORKLIB RULES first question is answered

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1.

The two schools of thoughts in macroeconomics are:

Classical school of thought: As per the classical economists, markets always clear themselves and prices and wages are all flexible. They believe that government intervention is not needed for markets to clear and they can clear themselves and achieve equilibrium through price adjustments

Keynesian school of thought: Arised after the Great depression of 1929, keynesian economists believe and focus on the AD side of the markets and believed that markets do not always clear themselves and policy changes are required in the form of fiscal and monetary polices to alter AD and thus help the economy reach equilibrium.