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Why would policymakers want to drive unemployment below the natural rate, given that inflation will result?
If efficiency wages are widespread throughout economy but most worker feel they are significantly underpaid, will paying worker more prevent them from shirking?
Assume that the US balances its federal budget, and savings and investment remain where they are today. What impact would this have on the economies of Europe?
When someone argues that the national debt is bankrupting the country, what arguments can you use to rebut this assertion?
Ben Stein wrote an open letter to Henry Paulson, just after Paulson was appointed US. What policies enacted today could eventually eliminate these problems?
Why doesn't the federal government add the present value of its long-term liabilities for Social Security and Medicare to its budget reports each year?
Why is it so difficult for the federal government to run a budget surplus? What is one benefit to business when the government budget is in surplus?
Do you think the United States is still on the right side of the Laffer curve today? Why or why not?
Economists generally agree that Americans save too little, and if they saved more. What incentives might the government introduce to get people to save more?
Does this argument seem reasonable? What counterarguments can you make in support of using fiscal policy?
Explain why increasing government purchases of goods and services is expansionary fiscal policy.
Would the fact that nearly half of the federal budget goes to Social Security and Medicare have any impact on the variations in GDP? Why or why not?
Why could lowering tax rates actually lead to higher tax revenues for the Brazilian government (a Laffer curve experiment)?
What sort of problems would this introduce for policymakers and the economy? What would be the benefit of such an amendment?
Has Congress essentially abandoned fiscal policy and left macroeconomic stabilization to the Federal Reserve and the setting of monetary policy?
Why would the introduction of universal health care paid for from general revenues have an impact on aggregate supply? Why or why not?
What impact did this have on net exports for the United States? Why did Japanese automakers build plants in the United States?
Why is consumer confidence so important in determining the equilibrium level of output and employment?
Explain why the aggregate supply curve is horizontal during a Keynesian depression period, positively sloped during the short run, and vertical in the long run.
When the economy is hit with a supply shock, such as oil prices rising from $25 a barrel to $75, why is this doubly disruptive and harmful to the economy?
Of motives for holding money, which one is most important for monetary policy? Why are monetary policy lags important to the effectiveness of monetary policy?
What is so important about protecting the value of the currency? How does Fed independence help?
How is this independence attained? How important is this independence to policymaking at the Federal Reserve?
Why Does the existence of this insurance eliminate the need for reserve requirements? Does it essentially prevent runs on banks?
The reserve requirement sets the required percent of vault cash plus deposits with regional Federal. What would be the effect on the actual money multiplier?