Modern economics - short answer

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Some of these questions have no right or wrong answers. For example, you will need to decide for yourself if you are a Keynesian or a Monetarist. Keynesians believe that the economy will not come to equilibrium when left to its own devices. Monetarists on the other hand, believe that government intervention in the economy will result in inflation, but little economic growth. The founder of monetarism was Milton Friedman, and the founder of Keynesian was John Maynard Keynes.

For question 8, note that those who oppose free trade you will discuss how it leads to the subjugation of native people, who give up their traditional ways of lief in order to work in factories. This creates a gap between the generations, which damages their cultural heritage. Those who believe in free trade will indicate that the economies of nations that trade freely grow faster than those that don't. You will need to decide for yourself which arguments make the most sense to you.

The US can compete with cheap labor because it possesses many advantages over China. Its educational system produces imaginative, innovative thinkers. Thus the US economy competes favorably in terms of technological advancements.

Another question that requires your personal opinion concerns the health care legislation. The final version of the bill could result in a massive increase in government intervention, which would be a step toward socialization. However, the economy as a whole would remain largely capitalistic. Those who oppose the bill believe the it will cause a dramatic decline in the quality of health care available to everyone. Those who support it believe that the current increase in the cost of health care is not sustainable. By cutting costs we can keep the quality high and cover more people. A healthier population will in time result in a net savings to the government and to those who pay for health care. Economically speaking government intervention could result in "dead weight" loss, since the market will be pulled away from equilibrium price and output. However, if the ...