FRQ 1: Fiscal Policy and Economic Growth
a) Define fiscal policy and explain how expansionary fiscal policy can promote economic growth in the short run.
b) Analyze the potential long-run effects of persistent budget deficits on economic growth.
c) Use a graph of the loanable funds market to illustrate and explain the crowding-out effect of government borrowing on private investment.
FRQ 2: Monetary Policy and Inflation Control
a) Define monetary policy and explain how contractionary monetary policy can be used to reduce inflation.
b) Discuss the long-term effects of contractionary monetary policy on unemployment, output, and the natural rate of unemployment.
c) Use a graph of the Phillips Curve to show the trade-off between inflation and unemployment in the short run and explain why this trade-off does not exist in the long run.
FRQ 3: Open Economy and Fiscal Policy
a) Explain how expansionary fiscal policy in a country affects its interest rates and exchange rates in an open economy.
b) Analyze the impact of these changes on the country’s exports, imports, and net exports.
c) Use a graph of the foreign exchange market to illustrate how changes in interest rates influence the value of the domestic currency.
FRQ 4: Open Economy and Monetary Policy
a) Explain how expansionary monetary policy in a country affects its interest rates and exchange rates in an open economy.
b) Analyze the impact of these changes on the country’s trade balance and capital flows.
c) Discuss the role of monetary policy coordination between countries in stabilizing global financial markets.
FRQ 5: International Trade and Long-Run Growth
a) Explain the relationship between trade openness and long-run economic growth.
b) Discuss how fiscal and monetary policies can influence a country's current account balance and its ability to sustain growth.
c) Use a graph to show how changes in the real exchange rate affect the volume of exports and imports in the long run.
FRQ 6: Fiscal and Monetary Policy Interaction
a) Discuss how fiscal and monetary policy can work together to achieve economic stability in the long run.
b) Analyze the potential conflicts that might arise between fiscal and monetary policymakers in an open economy.
c) Use an Aggregate Demand-Aggregate Supply (AD-AS) model to show the effects of simultaneous expansionary fiscal and contractionary monetary policies on price levels and output.
a) Define fiscal policy and explain how expansionary fiscal policy can promote economic growth in the short run.
b) Analyze the potential long-run effects of persistent budget deficits on economic growth.
c) Use a graph of the loanable funds market to illustrate and explain the crowding-out effect of government borrowing on private investment.
FRQ 2: Monetary Policy and Inflation Control
a) Define monetary policy and explain how contractionary monetary policy can be used to reduce inflation.
b) Discuss the long-term effects of contractionary monetary policy on unemployment, output, and the natural rate of unemployment.
c) Use a graph of the Phillips Curve to show the trade-off between inflation and unemployment in the short run and explain why this trade-off does not exist in the long run.
FRQ 3: Open Economy and Fiscal Policy
a) Explain how expansionary fiscal policy in a country affects its interest rates and exchange rates in an open economy.
b) Analyze the impact of these changes on the country’s exports, imports, and net exports.
c) Use a graph of the foreign exchange market to illustrate how changes in interest rates influence the value of the domestic currency.
FRQ 4: Open Economy and Monetary Policy
a) Explain how expansionary monetary policy in a country affects its interest rates and exchange rates in an open economy.
b) Analyze the impact of these changes on the country’s trade balance and capital flows.
c) Discuss the role of monetary policy coordination between countries in stabilizing global financial markets.
FRQ 5: International Trade and Long-Run Growth
a) Explain the relationship between trade openness and long-run economic growth.
b) Discuss how fiscal and monetary policies can influence a country's current account balance and its ability to sustain growth.
c) Use a graph to show how changes in the real exchange rate affect the volume of exports and imports in the long run.
FRQ 6: Fiscal and Monetary Policy Interaction
a) Discuss how fiscal and monetary policy can work together to achieve economic stability in the long run.
b) Analyze the potential conflicts that might arise between fiscal and monetary policymakers in an open economy.
c) Use an Aggregate Demand-Aggregate Supply (AD-AS) model to show the effects of simultaneous expansionary fiscal and contractionary monetary policies on price levels and output.