A typical short answer should be between 100-150 words each question. All short answers must contain information using no external research.  Required to respond in their own words using applicable examples and knowledge gained from the class.

1. Describe what occurs to American imports and exports when the U.S. dollar is strong. Describe what occurs to American imports and exports when the U.S. dollar is weak.

2. What precautions can the Federal Reserve take to avoid inflation for the entire economy?

Explain each precaution using a specific example.

3. What is meant by the term 'stagflation'? What happens if stagflation occurs within the economy in terms of consumer spending and consumer confidence?