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Do you think this independence is beneficial and should be maintained, or would you prefer that elected officials have more control over monetary policy?
How do the events of the 1980s and the early 2000 support or disprove the central supply-side position about the relationship between taxes and economic growth.
The BIG Idea Why and how could monetary policy be destabilizing? Contrasting How do aggregate supply and demand differ from simple supply and demand?
State an example of how politics sometimes overrides economic policies. Describe how economists sometimes differ in their views about the economy.
Discuss the difficulty of using discretionary fiscal policy. Explain why new problems will arise in the economy, even as old ones are solved.
Describe how monetarists determine the proper growth rate for the money supply. Explain how supply-siders would reduce the government's role in the economy.
Identify which component of GDP Keynes labeled as the cause of instability. Discuss the effects of the multiplier and the accelerator.
Fiscal and Monetary Policy Suppose that Congress passes a massive tax cut during an election. What actions might the Fed take in response? Explain your answer.
Analyzing Visuals Look at the cartoon on the previous page. Why do you think economists care so strongly about their views?
Do you favor protectionism as a national trade policy? Why is a nation with abundant resources better off trading than being self-sufficient?
Describe how the value of the dollar is established using a flexible exchange rate. Describe the meaning and effect of a trade deficit.
Making Generalizations What would happen if the United States lost its comparative advantage in producing soybeans?
What are the factors involved in determining exchange rates? What is the relationship between foreign trade and the international value of the dollar?
Explain the significance of foreign exchange, foreign exchange rate, fixed exchange rates, flexible exchange rates, floating exchange rates and trade deficit.
Why would you recommend that we increase or decrease trade barriers on athletic shoes? Explain your answer.
If you, as a member of Congress, were approached by a delegation of autoworkers seeking additional tariff or quota protection, how would you respond?
What six arguments are commonly used to support the protectionists' views on trade? What happened to tariffs during the Great Depression?
Explain the significance of tariff, quota, protective tariff, revenue tariff, protectionists, free traders, infant industries argument and balance of payments.
Explain the significance of monetary policy, baby boomers, and Council of Economic Advisers. Why do some people blame the Fed for the recession of 2001?
Why did legislators make the decision to deregulate the industry? Did deregulation have the expected benefits? Were there any unanticipated costs? Explain.
Analyzing Information According to monetarists, how do fluctuations in the money supply affect the economy?
The BIG Idea How do supply-side economists and demand-side economists differ with regard to the role of government in the economy?
Listing What are the assumptions of supply-siders? Explaining What problems exist for monetary policy?
Explain significance of Medicare, fiscal policy, Keynesian economics, multiplier, accelerator, automatic stabilizer, entitlements and unemployment insurance.
Summarize the articles and answer the following question: How do changing gasoline prices impact AS and AD? Explain your answer.