5. (10 pt.) Define what is meant by the terms Real GDP and Nominal (current dollar) GDP? What was the rate of growth in real GDP (annualized) in the 4^th quarter of 2023 and the 1^st quarter of 2024? How fast is GDP forecasted to grow in 2024? Why is nominal GDP increasing much faster than real GDP? . Is consumer spending increasing or decreasing? Explain. What is meant by the term "recession"? Will the U.S. economy enter a recession in 2024? Explain. What is the current unemployment rate? Do you expect the unemployment rate to increase or decrease in 2024? Explain.

6. (15 pt.) President Biden's $1.9 trillion Covid-19 relief package was financed entirely with borrowed money...Describe two expansionary fiscal policy that Congress has enacted since mid-March to offset economics dislocations of Covid-19? Include supporting numbers. Assuming that the marginal propensity to consume is 0.7 calculate the magnitude of the fiscal multiplier? On an annual basis calculate the total impact each policy will have on GDP.

Analyze how this fiscal policy that Congress has enacted affects U.S. economic growth, unemployment, Federal budget deficits, and inflation in the context of our basic macroeconomic model. Explain your reasoning carefully. Assume initially that actual output is ten percent below potential output and show both the short run and long run adjustment in a well-labeled aggregate demand - aggregate supply graph.

7. (15 pt.) How large was the U.S. federal budget deficit in the 2020 and 2021 fiscal year? Based on recent forecasts how large is the deficit projected to be in fiscal 2024 fiscal year.Explain how the U.S. Federal government is able to finance these deficits? Explain how the U.S. was able to run enormous budget deficits and still keep interest rates extremely low. Discuss at least three problems that are caused by deficits of this magnitude. Check out the US Debt Clock real-time projections How large is the budget deficit? What is meant by the term public debt? What is the current U S public debt.

http://www.usdebtclock.org/