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    Fluctuations in economics

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    Just looking for a paragraph or two for each question to help get a discussion going. Please cite references when needed.

    1) What have been the major sources of disruption over the past several years?

    2) From an Aggregate Demand and Supply perspective, does it matter which programs are adopted? Which programs do you recommend should be adopted? Should subsidies and tax breaks to business (corporate welfare to agriculture, forestry, export promotion, research and development, removal of dividends tax etc. ) be the focus or should subsidies go to individuals (subsidies to education, social security, unemployment insurance, aid to families with dependent children, Medicare etc.) ? How will the programs proposed affect future growth possibilities for the economy (how will they effect the PPF and long run aggregate supply)?

    3) How will the programs affect the debt? How will they affect private investment? Is crowding out a concern in the short versus long run as a result of the proposed policies? How will the different proposals affect the income distribution? How will they effect consumer confidence and spending?

    4) Please discuss the incomes and expenditures in terms of the Keynesian model. You can agree and/or disagree with the Keynesian assumptions.

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    Solution Preview

    I have outlined some ideas for you to use. If you have any questions or need further clarification, please ask.

    1) What have been the major sources of disruption over the past several years?
    While the major sources are focused on crashes within the systems of several Asian countries, most notably the Thailand collapse, there have been others of note. The Thai collapse was the first and there have been issues within the Asian continent since this original collapse that countries have struggled with. There has been recovery, but that area of the globe has had several problems with economic conditions. China has struggled in recent years, creating concerns and earlier this year, the Japanese market seemed to implode as well.

    Another reason for recent problems has been the continued sensitivity to both economic and environmental issues for the oil companies. Fluctuations in pricing, some coming during the economic recession in the United States and other countries, provided some very difficult moments for consumers and business. The loss of an oilrig created a disaster in the Gulf of Mexico and damaged pipelines continue to create reasons for gas and oil price fluctuations.

    The bursting of the housing bubble and the sub-prime mortgages along with scandals relating to Wall Street have led to not only difficult disruptions, but also a major recession. The effects of the recession are still being felt in areas like employment, housing and foreclosures, and credit. While the stock market has recovered, companies are making a profit, and banks are doing well again, the consumer is still wary or struggling (or both) to gain a foothold in the recovery. Within this the collapse of Lehman Brothers, created the most widespread industry problem for the government since the Great ...

    Solution Summary

    A review of economic fluctuations, program choices and information based on the questions provided.