Macroeconomics is a branch of economics concerned with the national economy's structure, performance, and behavior. It focuses on identifying the variables that affect the primary economic trends, with particular emphasis on inflation, global commerce, investments, and national income. Macroeconomics plays a critical role in developing policies and strategies for both governments and large enterprises.

There are two main areas of study in macroeconomics: the business cycle and questions of governmental intervention. The business cycle focuses on factors influencing long-term economic expansion and the effects and causes of short-term changes in the nation's Gross Domestic Product (GDP). The second area, questions of governmental intervention, focuses on unemployment, inflation, and general economic policies such as spending and taxing.

John Maynard Keynes and Milton Friedman are two prominent economists who have significantly contributed to the field of modern macroeconomics. Keynes supported monetary policy and government investment as means of reducing the negative consequences of economic expansions, booms, and crashes. He is well-known for his seminal paper, the "General Theory of Employment, Interest and Money," which promoted government involvement to encourage investing and consumption and reduce the worldwide Great Depression's impact.

On the other hand, Friedman emphasized free markets, minimizing the government's role in the economy. He developed modern currency markets, supporting free markets and consumption taxes. Friedman's most well-known contribution was monetarism, in which he posited that inflation is a monetary phenomenon and developed theories around nominal variables that led to significant changes in economic policies worldwide.

Classical economics emphasizes self-regulating, open markets as the most effective way to build a strong economy. The long-run aggregate supply curve is considered inelastic, meaning that deviations from full employment are only momentary. Therefore, classical economists believe in minimizing government intervention and working to prevent any potential obstacles to the efficient operation of markets.

However, Keynesian economists disagree with this view. They maintain that because of unreliable markets, the economy may operate below capacity for an extended period. To overcome this, Keynesian economists advocate for expanding fiscal policy and increasing government engagement to maintain economic health.

In summary, macroeconomics plays a significant role in understanding the overall economic performance of a country. Keynes and Friedman have made significant contributions to the field, developing theories that lead to significant changes in economic policies worldwide. Classical economics believe in self-regulating markets and minimizing government intervention, while Keynesian economics emphasize government involvement as crucial to maintaining economic health.

Rewritten Version:

1. Keynes and classical theorists agreed that the economy is influenced by future expectations, but differed in solutions. While Keynes advocated for corrective government action, classical theorists relied on people's self-interest to fix the system.

2. Traditionalists prioritize free market function and may limit trade unions for pay rigidity. Supply-side economics, tracing back to classical economics, emphasizes supply-side policies for long-term growth. Keynesians do not negate it, but recognize limitations in addressing demand shortage during recessions.

3. Classical economic focus on monetary policy vs. Keynesian emphasis on fiscal policy, particularly during economic slowdown.

4. GDP measures a country's domestic production and is evaluated quarterly or yearly using expenditure, productivity, or income methods, adjusted for inflation and population growth. Real GDP, adjusted for inflation, indicates an economy's product/service output. Prosperity and living conditions indicate economic welfare, measured by factors beyond income, such as medical care and environmental elements. Limitations include income distribution, externalities, non-monetary transactions, composition of GDP, quality improvement, and population growth.

5. Real GDP misrepresents welfare if real money supply fluctuates, and people demand more money to satisfy their needs. Increase in real GDP does not always indicate an increase in welfare.

Criteria for Economic Condition:

The measure of a nation's economic health is its national income. A thriving economy results in an increase in productivity and national income. Therefore, a rise in national income points towards an increase in output and a successful economy. National income accounting helps determine if a nation's economy is functioning properly.

Assessment of Living Standards:

National income accounting provides information on the average income per person and the purchasing power of the population. As national income increases, per capita and disposable incomes also rise, resulting in an increased purchasing power and standard of living. Thus, an increase in actual national income improves the standard of life for the population.

Inflation Calculation:

The valuation of national income accounting helps to determine the level of inflation in a nation. It's significant in determining the purchasing power of the population and the changes in the cost of products produced.

Wealth Distribution:

Calculation of national income takes into consideration wealth distribution in the nation to ensure that it's fairly divided among the population and not concentrated in a small number of individuals. This includes aspects like income tax caps, transfer receivable programs or social security, subsidies, among others. Achieving a fair distribution of resources is crucial in national income accounting.

Economic Development Rate:

By comparing the recent national income with the current income, it's possible to determine the rate of economic development. The intermediate national income report helps determine if the rate of economic growth is increasing, decreasing, or stationary. Analyzing national income numbers can determine whether the economy is expanding or contracting.

Budget Formulation:

National income accounting plays an indispensable role in the formulation of a nation's government budget, the primary economic task of the government. Analyzing national income is crucial in estimating prospective government revenue from various sources and potential spending in various industries for a specific fiscal year.

A. IS Curve:

Y=C+I+G

Y=(140-10r)+40+0.75Yd+100

Y=(104-10r)+40+0.75(y-T)+100

Y=140-10r+40+0.75y-60+100

Y=280-60-10r+0.75y

Y=220-10r+0.75y

0.25y=220-10r

Y=220-10r

0.25

Y=880-40r

B. M^(d)= M^(s)

0.25y-5r=85

-5r=85-0.2y

-85+0.2y=5r

-85+1/5y=5r

1/5y-85=5r

r=1/25y-17

C. Y=880-40r

r=1/25y-17

Let's solve for Y using the given equation: $Y = $880 - 40\ \times \frac{1}{25}y + 40\ \times 17$. This can be simplified as $Y = $880 - \ \frac{8y}{5} + 680, which further simplifies to y + $\frac{8y}{5} = 880 + 680\ $. By solving for y, we get the result $\frac{13y}{5} = 1560$ which means y is $\frac{1560\ \times 5}{13}\ $. Given that the income, y, is 600, we can next solve for the interest rate using the equation r = $\frac{1}{25}y - 17\ $. Substituting 600 in the equation, we get r = $\frac{1}{25} \times 600 - 17\ $ which equals 24 − 17, which is equivalent to 7%.

Lastly, the variable D can be solved for using the equation $\frac{1}{mpc}\ $. Denoting mpc as 0.75, we can find that D equals $\frac{1}{1 - 0.75\ }\ $ which simplifies to $\frac{1}{0.25}\ $ and therefore equals 4 for variable MG.