Learning Goals
By the end of this portion of the unit I should..
1. Understand easy and tight money policy
2. Understand the differences between Keynesian and Hayekian economics.
3. Be able to apply my learning to analyze the economic crisis of 2008.
1. Understand easy and tight money policy
2. Understand the differences between Keynesian and Hayekian economics.
3. Be able to apply my learning to analyze the economic crisis of 2008.
Unit 4.2 The Business Cycle |
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Keynes vs. Hayek Round 1
Keynes vs. Hayek Round 1 |
Keynes vs. Hayek Round 2 |
Keynes vs. Hayek Quiz
If you answered mostly A you are a Keynesian and believe:
•You believe that aggregate demand, which is the total spending capacity in the economy, does not necessarily equal aggregate supply, which is the total productive capacity of the economy. Instead you think it is influenced by many other factors and at times behaves unpredictably, affecting production, employment and inflation.
•You also believe that the private sector’s decisions sometimes lead to inefficient macroeconomic outcome, which requires a response from government in the form of, particularly monetary policy by the central bank and fiscal policy actions by the government, which will stabilize output over the business cycle.
If you answered mostly B you are a Hayekian and believe:
•You believe that business cycle results from the central bank's inflationary credit expansion and its transmission over time, which leads to a capital misallocation that is caused by the artificially low interest rates.
•You believe that instability of the market economy occurs because of the exclusion of the most important regulator of the market mechanism: money. Money itself can only be regulated by the market process, free of intervention from government.
•You also believe that a monopolistic governmental agency like a central bank does not possess the relevant information to be able to govern the supply of money, nor know how to use it correctly. Lastly, you feel unemployment and idle resources stem from a previous, unsustainable episode of easy money and artificially low interest rates.
Follow - up Question: Which thinker do you think is more 'Liberal'? Which is more 'Conservative'? When you found which thinker you were more like, did it fit with how you 'see yourself' politically (remember where you put yourself on our political spectrum) and economically?
Has this view changed since the beginning of the course?
Has this view changed since the beginning of the course?
Globalization
After watching the video on globalization, do you think much has changed in the global world since 2019? Look up the term isolationism. What do you think about it? Then watch the video below on the USMCA. How is it in contrast to isolationism?
China's Exports as a Percentage of its GDP
Unit 4.3 Monetary Policy
After viewing the Monetary Policy PowerPoint complete your Inside Job Questions.
Monetary Policy | |
File Size: | 628 kb |
File Type: | pptx |
Inside Job 2008
Together we will watch the film Inside Job. Your job is to reflect on the causes of the economic downturn of 2008 and then read the articles linked here and here on failing banks in America today. What are the causes and effects of bank failures in the US? What are the differences between Canadian and American Banks (read the article linked here)? What caused the economic recession (depression??) of 2008? How can it be prevented in the future?
This will be the focus of 1 of your exam questions. You will need to discuss the movie + macroeconomic concepts you have learned.
This will be the focus of 1 of your exam questions. You will need to discuss the movie + macroeconomic concepts you have learned.