Stabilizing prices is one of the macroeconomic goals of policy making. Price stability calls for taming inflation or deflationary pressure in the economy.

What are the various forms of unemployment? What type of unemployment is the most difficult to solve? Why?

Discuss the differences between unemployment and underemployment and give examples for each of them. What are the costs of unemployment and underemployment on the economy?

What are the costs of inflation? What are the costs of deflation? Why do policymakers need to tame inflation (deflation) to stabilize prices? When does rate of inflation become a problem in the economy?

Do you think this intervention was necessary? What are the consequences of this intervention? What might have happened if they had not intervened?

There is ongoing debate regarding the structure of the current income tax system in the U.S. Many opponents of the current system argue that under its current structure, many wealthy households can avoid taxes. The tax system is simply too complicated and confusing for most of the households. One solution that has been proposed is the "flat tax" system.

What are the benefits and detriments of replacing the current income tax system with a flat tax system? Who benefits and who might be harmed by the introduction of a flat tax? What implication does the flat tax system have for tax preparation companies such as H&R Block?