Question 1

Read the following passage from a newspaper article:

"In his first 100 days in office, President Joe Biden has created large waves in economic policy

with his proposals for $ 6 trillion (or six lac crore) worth of stimulus and investment packages. In

March, he proposed the $ 2.2 trillion American Jobs Plan to build and rebuild American

infrastructure and provide better care for the elderly and children. In April, he followed with the

American Families Plan of $ 1.8 trillion to provide public funds for universal pre-school,

community college education, and tax cuts for lower-income households...(These will be) financed

through higher corporate, capital gains, and income tax on the rich"

Which concepts of the syllabus is related to this passage? Discuss in detail. No need to

draw diagrams.

Syllabus:

• Classical Macroeconomics & the Self-Regulating Economy
• Keynesian Macroeconomics & Economic Instability
• Fiscal Policy and the Government Budget
• Money, Banking, the Financial System and the Central Bank
• Money and the Economy
• Monetary Policy
• Economic Growth

Question 2

According to classical economists, how does a change in money supply affect the economy? Do

you agree with their point of view? Why or why not?