Image that the mayor has hired you as a consultant to evaluate the increase in aggregate demand in the city where you live. Describe to the mayor one (1) aggregate demand and supply factor that would have the greatest impact on the economy of your city. Provide a rationale for your response.
Determine what fiscal policy measure has a more direct impact to the economy. Is it an increase in government spending or an equal decrease in taxes if consumer confidence is lower than the previous month? Explain your reasoning.
Economy Questions
In view of the weak economy of the last several years, explain which of the four (4) components of GDP had, or is having, the greatest positive impact in our economy. Use the following historical tables to support your response. o Go to the Bureau of Economic Analysis at www.bea.gov Navigate on the home page to where it states “National,” then select “Gross Domestic Product”. Next, select “GDP and the National Income and Product Account (NIPA) Historical Tables”. The direct Web address is http://bea.gov/national/index.htm#gdp
Imagine that you have a fixed 30-year interest rate for your mortgage, and the economy has experienced unanticipated inflation. Examine who the winner and loser would be. Is it the borrower or the lender in the given scenario? Provide support for your response.