3. Please list the 4 key supply side growth factors we discussed, and discuss their viability in terms of getting our economy growing again, given that today our economy is not growing.
a. The slides should provide you with what you need here.
b. The issue of viability â if the economy is growing slowly or not at all, do we have any chance of achieving success with each of the 4 growth factors? What will likely cause us problems? What approaches could we use to increase our odds of success? You need to think carefully on this one.
4. Creative problem solving
Scenario #1:
The rate of growth in the US economy is currently 0.5% annually. Your mission is to increase our growth rate to at least 4% annually, without setting off unacceptable levels of inflation. You have the tools of fiscal and monetary policy available.
a. Present your solution to the problem â write it down first.
i. Strategy for creating your solution:
1. First identify a specific natural resource and think through how having more of it or a better quality of it could lead to significantly increasing the GDP growth rate.
2. This will lead you to a general solution to the problem.
3. Write it down! The explanation of the solution should take at least one good paragraph!
4. Determine what will be required to make the solution happen, typically it is money.
5. Think of ways to use your fiscal and monetary policy tools to get the needed money.
6. To attack the problem you must select at least one Monetary Policy tool and one Fiscal Policy tool.
b. Write down the names of the one fiscal policy tool and the one monetary policy tools you picked.
i. Remember â for this question you need one Fiscal Policy tool and one Monetary Policy tool.
c. Explain why you picked the tools that you picked and why you did not select the other choices.
i. Specifically explain what is good about the tool you selected and what is not so good about the tools
you did not select? Do this for
both the monetary and fiscal policy tool that you selected. The key here is to use some decision criteria in making your choice.
d.,Thoroughly and completely explain how your solution would work to solve the problem. You must include and explain the use of your monetary and fiscal policy tools and indicate the impact your solution would have on the key economic variables. Please present your answer using a chain of events format. Be specific. I need to see the detail.