I need answer for #1 this evening and the rest no later than Sunday evening.
1. Do you think the economy is in or in danger of falling into a recession then expansionary monetary policy is the correct course of action. If you think the economy is in danger or experiencing a period of inflation than contractionary policy is the correct course of action. Also state the policy tool you would use and how it would be used to enact the policies that will expand, contract or maintain the economy. (Opinion)
Be careful to identify the positive reasons for your normative position.
(1 paragraph answer is sufficient)
2. Suppose the Fed increased the money supply to $1,800 billion. What would happen to equilibrium price and quantity? (Short answer)
The Graphs are located here http://highered.mcgraw-hill.com/sites/0072819359/student_view0/chapter15/interactive_graphs.html
3. Identify the normative policy school (Keynesian, New Classical, Supply Side, Monetarist, or Mainstream) which most closely represents your own normative policy views. Defend your position and offer at least one counterargument to the alternative schools. (1 paragraph)
4. What effect will an increase in government spending have in the short-run and in the long-run? Explain why the long-run adjustment occurs. - (Short answer)
Identify who invented the "equation of exchange" together with an explanation of it, specifically, explain under what conditions an increase in the money supply would lead to only higher prices, higher prices and increased output, and increased output with no change in the price level. - (Short answer)
Graphs are located here: http://highered.mcgraw-hill.com/sites/0072819359/student_view0/chapter16/interactive_graphs.html
5. Currently 50% of US and Brazilian production is devoted to wheat and coffee. What would happen to total output of wheat and coffee given the following levels of production of coffee and wheat respectively:
a. US 25% & 75%, Brazil 75% & 25% ?
b. US 0% and 100%, Brazil 100% & 0%?
c. Where is total output the highest and why?
6. identify the persons who came up with the ideas of:
a. the real GDP price index
b. the concept and measurement of "Business Cycles" -
c. the idea of "real interest rates."
Please explain the theories these people proposed.
7. Explain what happens if government spending increases by $400 billion.
Hit Reset and explain what happens if investment spending decreases by $200 billion.
Hit Reset and explain what happens if government spending increases by $400 billion and taxes decrease by $400 billion.
For this economy what is the MPC, MPS and the multiplier?
Graph is located here: http://highered.mcgraw-hill.com/sites/0072819359/student_view0/chapter10/interactive_graphs.html
8. Name the person and answer the desciption
a. the "American Keynes" and a description of Keynesian economic policies,
b. the popularizer of the idea of "Complete Crowding Out" and a description of the implications of this concept,
c. he who first articulated the idea of "functional finance" and a description of the theory as well as two competing theories. The competing theories are in the beginning of the chapter.