In the Keynes vs. Hayek video, Keynes says he wants to steer the economy while Hayek says he wants to set it free. Outline the arguments behind the Keynesian position and provide Hayekian criticisms. Conclude with your own argument and justify it.
2. What five concepts from this class should your classmates remember five years from now if they are to be informed consumers of national economic news? Describe three of the five concepts; explain why each is important and the problems with understanding each one. For example, you could choose GDP and part of your answer would be to explain why it is an imperfect measure of economic activity.
3. While flying back to school in the fall you end up sitting next to the CEO of an automobile tire manufacturing company who is angry about Chinese tire imports. He is worried that he will have to close several American tire-manufacturing plants, which will mean that lots of Americans will lose their jobs. He asks you what you think about how unfair foreign competition is and asks you to sign a petition he is taking to Washington, DC to ask the President to create a new tire tariff. You are too intimidated to tell him what you think while on the plane, but you get his card and write him a long letter after getting home – what do you put in the letter?
4. Explain, in depth, this statement: “Institutions matter.”
5. Explain, in depth, this statement: “Incentives matter.”
6. The Federal Reserve implements monetary policy while the Congress enacts fiscal policy. Discuss the pros and cons of both groups and their respective policies.
7. Explain how the minimum wage is a price floor, and discuss its positive and negative effects on the economy. Conclude with your own argument and justify it.
8. You have been asked to write an opinion editorial for a very prominent newspaper on the current high unemployment rate and the national debt. Explain your position and what you would do with sound economic reasoning.
9. In his Ted talk, Hans Rosling claims that, “The washing machine is the greatest invention of the 20th century”. Explain and justify his claim.
10. In his Ted talk, Alex Tabarrok says that, “The next Einstein could be out farming in some field in India”. Explain what he meant and his concept of “One Idea, One World, One Market”.
11. Explain two factors that can cause aggregate demand to decrease. What options does the leader of a nation have if he or she wants to boost aggregate demand in response? What are the pros and cons of these options?
12. Explain, in depth and clearly, several ways expansionary monetary policy can be implemented in an economy. Also, explain why these policies would be implemented and any short or long term effects these actions may have.
