Explain what assumptions need to be verified for an increase in money supply to generate an increase in prices. Also explain how these assumptions can be criticized from a Keynesian perspective.

Keynsian Model neoclassical economics

1) Using the quantity theory of money explain what assumptions need to be verified for an increase in money supply to generate an increase in prices. Also explain how these assumptions can be criticized from a Keynesian perspective.

2) Explain verbally and graphically a) the reasons that prevent the economy from reaching full employment in the old neoclassical system and b) the policies that can be implemented to restore full employment. You can use the same graph to answer both points

3) Explain verbally and graphically a) the reasons that prevent the economy from reaching full employment for Keynes/in the Keynesian model and b) the policies that can be implemented to restore full employment . You can use the same graph to answer both points.