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This is the last chapter in the course.  I hope you have enjoyed the course and are saddened to see it end.  What concepts or theories did you find most interesting and/or useful?  Is there an area where you changed your thinking? Re this chapter:  Which debate do you consider most important and interesting?  WhichContinue reading “Chapter 23: Six Debates over Macroeconomic Policy”

Describe the short run trade-off between inflation and unemployment.  Why is there not a long-run trade-off?  How long do you think the short-run lasts? (Or do you believe there is a trade-off at all – many economists don’t.  Why? In the short-run, the trade-off between inflation and unemployment is that when there is lower unemployment,Continue reading “Chapter 22: The Short-Run Trade-off Between Inflation and Unemployment”

How does consumer confidence interact with public policies when in a recession?  How about in a boom?  Does it make policies more effective or less effective in achieving economic stability? Why? When there is low confidence, like in a recession, the money supply is increased, which lowers interest rates and raises the demand for theContinue reading “Chapter 21: The Influence of Monetary and Fiscal Policy on Aggregate Demand”

This chapter is all about short term fluctuations in the economy – recessions and booms.  After reading the chapter what do you think about the current US (or Colorado) economy? Is a recession coming soon? Why or why not?  Is the economy in danger of overheating? Why or why not? (This is part of whyContinue reading “Chapter 20: Aggregate Demand and Aggregate Supply”

If the US market has a high demand for exported goods, how does this affect the equilibrium exchange rate in the United States and what does the new graph look like? The rate would go down and on the graph, the demand for dollars would go up. The real exchange rate would have to goContinue reading “Chapter 19: A Macroeconomic Theory of the Open Economy”

Post your 3 favorite margin notes from this chapter.  Why did you highlight and comment on these particular points in the text? (I know some of you don’t take notes as you read – just jot down three things that you found interesting in the chapter and why.) On page 374, in section 18-1b ofContinue reading “Chapter 18: Open-Economy Macroeconomics: Basic Concepts”

What are the costs of inflation?  Which is most important?  How about deflation?  Would that be a problem and for whom? The FRB worries more about deflation. Why? Do you agree? Why or why not Our textbook discusses six different costs of inflation. The costs of inflation include “shoe leather” costs which are when yourContinue reading “Chapter 17: Money Growth and Inflation”

The phrase “printing money” tends to be tossed around in discussions about the money supply.  How important is cash to the overall money supply?  In our system the Federal Reserve Board has at least some control over the money supply.  How are they related to the Federal government? Cash is important in the money supplyContinue reading “Chapter 16: The Monetary System”

Have you considered the trade-off between risk and return when making an investment?  Did it change your investment? Do you expect a risk premium related to the level of risk?  I have never really put any money into investments, but if I did I would definitely have to calculate the risk before I made anyContinue reading “Chapter 14: Basic Tools of Finance”

How does private savings impact investment?  Why is it important for individuals to save in an economy?  How do public policies such as tax policies affect savings rates?  How do government budget deficits affect interest rates? Private savings impacts investments when people save more money, they are increasing the supply of loanable funds. In turn,Continue reading “Chapter 13: Saving, Investment, and the Financial System”