labor economic indicators select 6 – 10 economic indicators

• What are the expansionary monetary policy and contractionary monetary policy? What are their policy instruments? How are they used to deal with the inflationary gap and recessionary gap? Which do you think is more appropriate today?

• If the Fed wants to increase aggregate demand, it can increase the money supply. If it does this, what happens to the interest rate and rate of inflation? Why might the Fed choose not to respond in this way?

• Should monetary policy be made by rule rather than by discretion? Why?

• The only thing backing up a nation’s currency (fiat money) in the modern world is faith in the government issuing it. If this is so, what should governments do to maintain a stable currency? How can the Central Bank (the Federal Reserve) build trust in the U.S. currency? What actions would undermine a currency?

2

By increasing the money supply, the Federal Reserve can lower interest rates. This has a broad impact on the economy as mortgages, business loans, etc. can be obtained less expensively. Some economists believe that the money supply increases contributed to a housing bubble and the subsequent housing market crisis of 2008-09. They suggest that this event is an example of how the Fed can create recessions by artificially encouraging bad investment decisions, and that the same pattern can be seen in the tech stock bubble of the late 1990s and other recessions even as far back as the Great Depression.

Evaluate this view of the cause of recessions. Do you agree or disagree? Why?

Though your answer needs to be correct in terms of economic theory (be sure to read the assigned chapters), creativity and diverse opinions are strongly encouraged.

3

For this Assignment, you will continue using the Fortune 500 Company Walmart. The focus here is on its domestic (American) operations, with global issues left for Unit 6. Course outcome(s) practiced and assessed in this Assignment: Assess how economic theory and concepts are utilized to maximize the quality of economic decision-making. Directions Begin by reviewing the following websites as resources for your Assignment: OECD Economic Indicators USA Department of Commerce Economic Indicators Department of Labor Economic Indicators Select 6–10 economic indicators that are of particular relevance to your firm and explain how they affect the performance of the company. Then, outline strategies on how the firm should respond to the changes in the economic indicators with the goal of maximizing revenues in the years ahead.