Assignment 1
Please read chapter 13 and answer the following questions:
1. What is a central bank? How does it differ from private banks?
2. What are the general powers of the Federal Reserve? How do they work? Why are they called general powers?
3. What would you advise the board of governors of the Fed to do in case of inflation? Recession? What would you have advised them to do in the 1981-1982 inflationary situation?
Discussion 1
This last week, the Federal Reserve raised the interest rates by a quarter percent. Why did they do this and do you agree with the Federal Reserve? How do you think this will affect the economy?
Assignment 2
Please read chapter 15 and answer the following questions.
1. What is the impact of technological change on growth? What is meant by disembodied technological change?
2. Why is investment in human capital so important to long-run economic growth?
3. What are some of the important ways through which America's growth rate could be increased?
4. What is the relationship between economic growth and the solutions to such ills as poverty, discrimination, and the welfare situation?
Discussion 2
There appears to be two camps in America when it comes to climate change and the causes of it. Some argue that climate change is a result of man made pollution from the use of fossil fuel and reduction of forests. Others disagree and argue that climate change is not real.
In your opinion, should we worry about climate change? How will it affect our economy in the short-run and long-run?
Assignment 3
Question 1. What is meant by the term "open economy" and "closed economy?" Please provide specific examples in your answer.
4. Consider the following hypothetical production possibilities schedules for the US and Honduras:
|
United States
|
Honduras
|
|
Units of Tractors
|
Units of Bananas
|
|
50
|
0
|
|
40
|
5
|
|
30
|
10
|
|
20
|
15
|
|
10
|
20
|
|
0
|
25
|
|
|
Units of Tractors
|
Units of Bananas
|
|
0
|
100
|
|
5
|
80
|
|
10
|
60
|
|
15
|
40
|
|
20
|
20
|
|
25
|
0
|
|
a. Plot the production-possibility curves.
b. Is there a basis for mutually beneficial trade between the two countries?
c. What will determine the terms of trade that are established between the two countries?
5. What was the basic role of GATT? What is the basic objective of the WTO?
Discussion 3
What imported goods do you often buy? How would you be affected if the US restricted international trade or stopped trading with other nations entirely?