4. Recently, the Fed has been raising interest rates in an attempt to lower inflation. Thinking about the AD/AS model, how will raising the rates achieve their goal?

5. (a) What does it mean for a currency to appreciate? (b) If you had a business in the US that imported goods from Asia, would you want the currency to appreciate? Explain.

6. If Americans decide to spend a smaller fraction of their incomes, what will happen to:

a. Interest Rates

b. Real Exchange Rates

7. (a) Why would policymakers want to increase aggregate demand. (b) Provide an example of a method the government could use to increase demand.

8. What Macroeconomic topics which seems most relevant to your life and why