There are 3 discussion topics to answer below. A minimum of one reference per topic. You have two pages to discuss all three
Discussion 8:
Topic: Unemployment and Cost Inflation
The two main forms of economic problems are unemployment and inflation. There are different types of unemployment in the economy. Moreover, some employed people are underemployed, particularly during economic downturns like recessions.
Stabilizing prices is one of the macroeconomic goals of policy making. Price stability calls for taming inflation or deflationary pressure in the economy.
What are the various forms of unemployment? What type of unemployment is the most difficult to solve? Why?
Discuss the differences between unemployment and underemployment and give examples for each of them. What are the costs of unemployment and underemployment on the economy?
What are the costs of inflation? What are the costs of deflation? Why do policymakers need to tame inflation (deflation) to stabilize prices? When does rate of inflation become a problem in the economy?
Discussion 9:
Topic: Macroeconomic Stabilization Policy
Stabilization policy is the use of government policy to reduce the severity of recessions and harness in excessively strong expansions. The government manages macroeconomic fluctuations (manage business cycles) to lessen the economic pain of recessions and tame inflation. By coordinating monetary and fiscal policy, the Federal Reserve Bank Chairman, Ben Bernanke, and U.S. Treasury Secretary, Henry Paulson, responded to the financial crisis by intervening in financial markets in unprecedented ways in 2008.
1. Do you think this intervention was necessary? What are the consequences of this intervention? What might have happened if they had not intervened?
There is ongoing debate regarding the structure of the current income tax system in the U.S. Many opponents of the current system argue that under its current structure, many wealthy households can avoid taxes. The tax system is simply too complicated and confusing for most of the households. One solution that has been proposed is the “flat tax” system.
2. What are the benefits and detriments of replacing the current income tax system with a flat tax system? Who benefits and who might be harmed by the introduction of a flat tax? What implication does the flat tax system have for tax preparation companies such as H&R Block®?
Discussion 10:
Topic: Comparative Advantage, Exchange Rates and International Trade
Globalization is becoming a very important topic in economic discussions. While some politicians favor protectionist policies because they feel these policies protect domestic producers, others claim free trade increases economic activity and has advantages for the country as a whole. Comparative advantage dictates which good or service a particular region specializes in and exports to other regions.
Discussion Checklist:
Do you think it is better to source from overseas or should tariffs be in place to protect American industries? Why?
List one good or service that your home region specializes in and where it exports this good. Why is your region particularly good at the production of that good or service?
What are the impacts of an exchange rate system on exports and imports?
