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Unformatted text preview: econ 3140-2 problem set one answers 1 1.) The issues raised in a, b and c are similar to ones faced in engineering and the natural sciences. 2.) The issues raised in d are similar to the ones faced in the social sciences. This is because d talks about how the beliefs and expectations of investors affect market outcomes. 3.) The success of stimulating the economy is going to depend on the governments ability to change peoples expectations about future economic growth. Right now people are pessimistic about the future, and if a stimulus package is successful, it will convince people to be more optimistic about the economys future. This is similar to how the success of renewable energy projects will depend on investors beliefs and expectations. 4.) While economists arent able to solve all the problems facing society, there are a number of areas in which theyve been very successful. The framework of economics has been useful in understanding the effects of government policies. The Federal Reserve has auseful in understanding the effects of government policies....
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- Spring '07