1. Are we ready for a little more complication in your macro model? One reason to do it is that it allows us to help explain the emergence of Ronald Reagan on the national political scene. He seized the moment, he identified the 'wave' of public sentiment and rode it into the White House. What was it that Ronald Reagan offered the solution to? What were the problems that the American people believed he would solve? What did he do? Please demonstrate the situation with AS-AD diagrams.
2. And how did he propose to solve it? Identifying the problem is only half the battle. What can we do to solve the problem? What was the name given to his 'package' of reforms designed to right the course of the American economy? Please use the diagrams from class to demonstrate the Reagan solution to our problem.
3. One last question on Reagan. What were the 'pieces' of his economic package and how did they all work together to form a complete solution?
4. Please explain the significant differences between the inflation caused by the military buid-up for Vietnam in the late 1960s and the inflation caused by the OPEC price increase in the early 1970s.[you may want to use the AS-AD model]