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    Hi,

    I'm just going over past paper questions on my macroeconomics exam and have the question:

    Explain the workings of the Classical Model of the economy and illustrate them by discussing the effect of a rise in government spending financed by borrowing.

    How would you attack that question?

    I have all my notes in front of me, such as derivation of the AD/AS curves, production functions, marginal product of labour curve, equilibrium, loanable funds market, demand for money etc.

    Not looking for a over explained answer, just a guideline!

    Thanks!
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    I would look at how a classicist tackles fiscal policy. I have only studies Keynesian fiscal policy thus far so cant help you on that.

    Start by exploring the mechanics of fiscal policy using ISLM if you were taught that then move on to Classical opinions and finish by evaluating their effectiveness.
 
 
 
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