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It seems that each time the Fed raises interest rates, stock market has an awful few days. Why do higher interest rates have such an impact on the stock market?
What would you want to give up for the Pujols card? What would the Pujols card holder expect in return? Who benefits from this trade?
Why does the fact that our labor markets are more flexible and more competitive than those of Europe make our Phillips curve tradeoffs more reasonable?
Why are inflationary expectations so important for policymakers to keep under control?
What would be the result if the Bank of Canada and the Federal Reserve in the United States assumed that natural rate was 7% when it really was closer to 5%?
Why couldn't problems of inflation be solved by simply requiring that wages, rents, profits, product prices, and interest rates are subject to cost-of-living.
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?
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?