1. Carefully explain the similarities and differences between the Classical and Keynesian perspectives on the effect of fiscal policy on the economy. 2. Suppose an economy is a level of GDP below full employment. Explain how monetary policy can be used to return the economy to full employment under a fixed and a flexible exchange rate. 3. Suppose inflation is expected to be four percent this year. Using the expectations augmented Phillips curve, explain how the Bank of Canada can lower the rate of inflation to two percent 4. A government is using fiscal policy to attempt to increase GDP. Will the multiplier effect be larger in an open economy or a closed economy