ECO 372 All DQs
• Why is economics considered a social science? What role does economics play in your personal and professional lives?
• What is the difference between real and nominal GDP? Does GDP accurately reflect the nation’s welfare? Why or why not? How can a country’s GDP be manipulated? In your opinion, is the U.S. GDP being manipulated? Explain your answer.
• What are the different types of unemployment? How do they affect the economy in terms of growth, labor force, and price of labor? Cite specific examples to support your response.
• Identify economic factors that affect the real GDP, the unemployment rate, the inflation rate, and a key interest rate. How do you predict the economy will perform in the next two years given the current state of two of the economic factors you identified? How might your organization be affected by these changes?
• Explain the viewpoints of classical and Keynesian economists. How did the economy that existed at the time of these theories influence them? Which theory is more appropriate for the economy today? Why?
• Why do Keynesian economists believe market forces do not automatically adjust for unemployment and inflation? What is their solution for stabilizing economic fluctuations? Why do they believe changes in government spending affect the economy differently than changes in income taxes?
• In your opinion, which two determinates currently have the greatest impact on aggregate demand and supply? Justify your response with an example.
• What is the difference between contractionary and expansionary fiscal policies? Which is more appropriate today? Explain your answer. How might contractionary and expansionary fiscal policies affect your organization?
• What are the uses of money? How do commercial banks and Federal banks create money? Is monetary policy conducted independently in the United States? Explain your answer. Is it important for monetary policy to remain independent from all parties? Why or why not?
• What is the difference between contractionary and expansionary monetary policy? What is the intention of each policy under a depression, recession, or robust economy? Which type of monetary policy is more appropriate today and why?
• What happens to the money supply, interest rates, and the economy if the Federal Reserve is a net seller of government bonds? What happens to the money supply, interest rates, and the economy if the Federal Reserve is a net buyer of government bonds. Why would the government implement a stimulus program into the economy?
• Rank the factors that contribute to the discount interest rate from most important to least important. Justify your rankings.
• How does a government budget deficit affect the economy? Identify two periods in recent history in which the United States has run budget deficits. What were the reasons for the deficits during those time periods?
• How does a government budget surplus affect the U.S. economy? Identify two periods in recent history in which the United States has run budget surpluses. What were the reasons for the surpluses during those time periods?
• What are the potential consequences of a country having a large overall debt? If you were in the position to implement a solution for the country’s long-term debt, what would it be and why?
• What are the positive and negative aspects of budget deficits and surpluses? What policy is best for today’s economy? Explain your answer.
• Explain how foreign exchange rates are determined. How do changes in interest rates, inflation, productivity, and income affect exchange rates? What are the advantages and disadvantages of a weak versus a strong dollar for imports, exports, international and domestic markets?
• Who benefits from a tariff or quota? Who loses? Why would domestic markets benefit from protectionist trade policies? How do protectionist trade policies affect a government’s wealth and fiscal policy?
• What is the effect of a trade surplus? What is the effect of a trade deficit? How do trade deficits and surpluses affect the industry in which you work?
• Why are trade agreements important for the various countries involved? How is international trade related to the U.S. standard of living as opposed to the standard of living of a small industrial nation or a developing nation? How does international trade affect a country’s standard of living? What impact does it have on the way Americans live life, spend, consume, and so on.?