1. What is monetary policy and how does the Federal Reserve execute changes in monetary policy?

2. What is fiscal policy and how is it different from monetary policy?

3. How do monetary and fiscal policy affect a firms earnings?

4. Why may this impact on earnings affect a firms dividends and its ability to expand?

5. Why will a change in interest rates affect investors willingness to own stock? Does the anticipation of higher interest rates argue for investing in stock?

6. Are all firms equally affected by changes in economic policy?

7. Why are expected changes in economic policy as important as the actual changes?

8. How may investors use ETFs to alter their portfolios asset allocation?

Beverly DeMaio has been invited to speak to the newly formed Unionville Teachers’ Investment Club. Initially, each member contributed $500, and these funds were placed in an interest-bearing money market account pending the first investment decision. The club members decided to invite a stockbroker to discuss individual stocks and Ms. DeMaio to cover the macro-economy and financial planning. The members have little knowledge of the Federal Reserve’s monetary policy and the federal government’s fiscal policy except what they hear nightly on local and national news broadcasts.