• Explain how open market operations impact the money supply.
• Explain the benefits and challenges of using monetary policy to address economic imbalances.
• Describe the concept of a liquidity trap.
• Explain the benefits and challenges of using fiscal policy to address economic imbalances.
• Explain how government borrowing can lead to crowding out.
• Examine the trade-off between inflation and unemployment.
• Explain why a natural rate of unemployment exists.
• Explain the benefits and challenges of using monetary policy to address economic imbalances.
• Explain the short-run cost of the economy of reducing inflation.