Respond to two of the following topics:

1) Policy makers can take steps to manage aggregate demand and offset economic instability, but it often takes months to manifest, and by then the economy usually stabilizes, meaning the policy does little to alleviate the problem it was meant to and could exacerbate other problems. Should policy makers try to stabilize the economy in times of economic crisis?

2) Inflation does not yield any benefits to society but imposes costs, but it is inversely related to employment and output, so taking steps to reduce inflation usually means increasing unemployment and reducing overall economic output. Should the central bank aim for zero inflation?

3) A nation's savings might not have an impact on the short term economy, but the higher they are the more economic prosperity can be expected in the long run. However, reducing taxes and encouraging saving disproportionately benefits the wealthy and may actually burden the poor, who would not be able to save to the same extent. Should tax laws be reformed to encourage saving?

Search entries or author