Choose one of the following topics.
Topic 1. “If production results in income and income is the source of spending, it would seem that the production of a full-employment economy would automatically guarantee enough spending to sustain itself. How, then, can unemployment occur?” Explain in detail (hint: review Say’s Law as explained in the chapter).
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Topic 2. Contrast in detail the classical and Keynesian views of unemployment. Explain in detail and consider the role of flexible versus 'sticky' prices.