1. Suppose the economy experiences a period of recession. How does the new classical approach to macroeconomic policy (aimed at eliminating the gap) differ from the Keynesian approach? Compare and contrast the classical and Keynesian views of aggregate demand and aggregate supply. Classical economics was developed in 1817 by David Ricardo. His ideas on economics lasted a long time. His ideas were such that the economy would self-level and focus more on the supply side of the economy. For example, you are the producer of a certain product and you need more money. As a result, you would simply produce more product. This concept lasted a little over 100 years. Then a man named John Keynes invented Keynesian economics. He thought there was more going on in the economy. His ideas were more oriented towards the short term as well as towards the demand of the economy rather than towards the supply. He believed that by controlling the demand curve, we could stabilize the economy. For example, you are the producer of a certain product and you cannot sell everything.,...