1. Explain the following to someone who does not know much about economics: "An increase in the percent of workers who are 'marginally attached' is a more meaningful indicator of the state of the economy than an increase in the unemployment rate."
2. There is an ongoing debate about the long-run impact of budget deficits on the economy. Make an argument to support each side of this debate. That is, make an argument to support the position that budget deficits are harmful to the economy's long-term prospects. Then, make the case that budget deficits may actually prove to be beneficial for the economy in the long run. Harmful beneficial
3. Economists debate the importance of household spending and houschold savings, and role that both can play in economic growth. Obviously, houscholds cannot both spend and save the same dollar of income. Would you rather have houscholds spend or save Explain.
4. Using the concept of Aggregate Demand and Aggregate Supply explain the following (assume the economy starts with a small contractionary gap in all cases). Please include an explanation of what might happen to each of the three curves, in addition to showing it on the graph: a) The stock market has declined substantially since the beginning of the year. AD: SRAS: LRAS:
5. States have found themselves with budget surpluses which they are using for tax breaks to their residents and for spending on items such as education, healthcare and public safety. AD: SRAS: LRAS: