Homework #10: Economic Policy Rules

1. Under what (if any) definitions of "budget" or of "balance" would you agree: "A federal balanced budget amendment would be good"? 2. What (if any) is a good rule for monetary policy, or is it best to rely on discretion? 3. Consider a major fiscal policy (spending, tax-cut, or tax-increase) proposal from a nation in which you have not lived. What are the good and bad points of the proposal? 4. Attach a recent news articles about long-term sustainability of government deficits outside the United States. Discuss if you agree or disagree with its theory of causes or effects of deficits.