Key Assignment Draft
Two important policy goals of the government and the Fed are to keep unemployment and inflation low, while at the same time making sure that GDP is increasing at an average of 3% per year. It is important to have the right mix
of policies and that all the variables be timed perfectly.
Part 1: Assume that the country is in a period of high unemployment, interest rates are at almost zero, inflation is about 2% per year, and GDP growth is less than 2% per year. Suggest how fiscal and monetary policy can move those numbers to an acceptable level keeping inflation the same. What is the first action you would take as the president? As the chairman of the Fed?
Why? What would be your subsequent steps? Make sure you include both the positive and negative effects of your actions and include the trade-offs or opportunity costs.
Include the following concepts in your discussion:
Demand and supply of money
Income and Productivity
Interest rates
Okun’s law
The Phillips curve
Taxation
Government spending
Wages
Aggregate supply
Aggregate demand
Long run and short run
Costs of inflation
The multiplier and the tax multiplier
An open vs. a closed economy
The idea of tax rebates to stimulate the economy
Part 2: Assume the country is in a budget deficit and
carrying a very large debt. Discuss the dangers of a high debt to GDP ratio and
a growing budget deficit. Would this change any policy changes you discussed in
Part 1?
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more