Select 5 of the following questions. Answer in complete sentences. Use concise, accurate writing to explain your answers. Use a separate sheet(s) of paper for your answers. Make sure to number your answers.
1. Briefly describe the primary components of monetary policy and what tools are available to manipulate portions of the macroeconomy.
2. Briefly describe the primary components of fiscal policy. Provide three examples of fiscal policy and its influence on the macroeconomy.
3. Explain the concept of “crowding out” and how that can negatively affect the U.S. economy in the future. Make sure to include the role of government expenditures and investments in your explanation.
4. How does the large size of the U.S. governmental deficit and overall debt present a macroeconomic challenge in the upcoming years? Provide three examples of tough choices in the near future.
5. How does velocity have a role in the overall performance of an economy? Make sure to include the role of the money multiplier effect in your explanation.
6. What are the advantages and disadvantages of a strong dollar and a weak dollar? Make sure to cite the proportion of the US import-export variables in relation to its overall GDP in your explanation.
7. How are “stickiness” and Keynesianism related? Cite several examples that explain the connection. Also, make sure to explain how conditions may either be similar or different from the days of Keynes to our present-day challenges.
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