ECON 312 Week 6 Discussion

ECON 312 Week 6 Discussion | Devry University

Week 6: Monetary Policy and Fiscal Policy

Initial Post (up to 10 points)

A healthy economy typically has low rates of unemployment and steady prices. Low rates of unemployment means that the economy is operating at its full potential. To ensure the economy continues to operate at potential GDP (full capacity where all savings are invested in production functions, and where all those who wish to work can find a job, and all other factors of production are fully utilized in the production function), governments use fiscal and monetary policies to lower unemployment rates and to control prices (inflation).

For your initial post, answer one of the following questions.

1.   Discuss the primary goals of expansionary and contractionary fiscal policies and their effects on unemployment rates, inflation rates, interest rates, private investment, and GDP.

2.   Discuss the goals of expansionary and contractionary monetary policies used by the Federal Reserve Bank and the approaches (called monetary policy tools) used to achieve each policy. Also, discuss the effect of each policy on GDP, price level, private investment (investment in capital acquisition by firms and housing by households), and net trade.

3.   In your opinion, which policy is more effective—monetary policy or fiscal policy? Why?

Multimedia Post (up to 15 points)

Create a short 1- to 2-minute slide presentation with a voice narration or a video using any technology you are comfortable with to explain one of the economic concepts listed below. Suggestions: Adobe Spark Page (Links to an external site.) with a Spark Video, Kaltura video post, or a narrated PowerPoint.

Start the presentation by introducing yourself (name and your topic of choice), and then give a brief explanation of at least one of the concepts listed below, including an example to support your presentation.

·         Expansionary fiscal policy

·         Contractionary fiscal policy

·         Government budget deficit

·         Money supply

·         Interest rate and demand for money

·         Required reserve

·         Expansionary monetary policy

·         Contractionary monetary policy

Peer Response Post (up to 10 points)

Respond to at least one of your peers' initial posts or multimedia posts.

Your response should add new facts, ideas, knowledge, and/or corrections to the initial post or the multimedia post. Also, provide examples to support your response post.