Econ 2301 exam 3 study guide for potential questions - fall 2016

Econ 2301 exam 3 study guide for potential questions - fall 2016

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Macroeconomics 2301 Potential questions and study guide for exam 3 Any 6 of these questions will be on the exam. 1. Addressing inflation using Fiscal and Monetary Policy tools. Scenario - The US economy is currently experiencing high rates of inflation. You have Fiscal and Monetary policy tools available to address this problem: a. To attack the problem of inflation you must select one Monetary Policy tool and one Fiscal Policy tool. Write down the name of your Fiscal Policy tool and your Monetary Policy tool. i. Think the options through and write down your choices. b. Please explain why you selected the tools that you selected and why you did not select the other choices? i. Specifically, explain what is so good about the tool you selected and what is not so good about the tools you did not select? Do this for both the Monetary Policy tool and the Fiscal Policy tool. c. Thoroughly and completely explain how your solution would work to solve the problem of inflation, and indicate the impact your solution would have on at least 5 key economic variables. Be specific. i. Present this using the chain of events format with up or down arrows to indicate the direction of impact on each variable. 2. Addressing recession using Fiscal and Monetary Policy tools. Scenario - The US economy is currently experiencing recession. You have Fiscal and Monetary policy tools available to address this problem: a. To attack the problem of recession, you must select at least one Monetary Policy tool and one Fiscal Policy tool. Write down the name of your Fiscal Policy tool and your Monetary Policy tool. i. Think the options through and write down your choices. b. Please explain why you selected the tools that you selected and why you did not select the other choices? i. Specifically, explain what is so good about the tool you selected and what is not so good about the tools you did not select? Do this for both the Monetary Policy tool and the Fiscal Policy tool. c. Thoroughly and completely explain how your solution would work to solve the problem of recession, and indicate the impact your solution would have on the key economic variables . Be specific. i. Present this using the chain of events format with up or down arrows to indicate the direction of impact on each variable.
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3. Please list the 4 key supply side growth factors we discussed, and discuss their viability in a slow growth / no growth future.
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