Ask the Expert: Last class we learned about the
Economic Indicators that are utilized to show the health
of the economy as well as the Business Cycle which is a
graphic representation of that health. This time we
learned about the tools the Federal Reserve and
Legislative Branch use to help control the economy. With
that information in mind read the following economic
scenario and make recommendations as to how to fix
the economy using either Monetary or Fiscal Policy, OR
some combination of both.
Scenario: Economic hardship has befallen the country
after a world war in the year 2055. Thankfully, we are
victors. However the economy is in dire need of fixing.
Record number of people are unemployed and GDP has
contracted to -5%. Deflation has also hit. The
President calls you his economic advisor in to help sort
out the economy and to make recommendations to the
Legislative Branch and The Federal Reserve in a hopes
that we can come to some sort of understanding. In 2
paragraphs
1. Offer a minimum of 2 tools that could help sort the
economy out
2. Explain how those policy tools will correct the
economy in the appropriate way.