1. Newspaper reports frequently suggest that the administration (regardless of who is president) is pressuring the Fed to lower interest rates. In view of your answer to Test Yourself Question 3, why do you think that might be the case?
2. Explain the difference between crowding out and crowding in. Given the current state of the economy, which effect would you expect to dominate today?
3. Given the current state of the economy, what sort of fiscal-monetary policy mix seems most appropriate to you now? (Note: There is no one correct answer to this question. It is a good question to discuss in class.)