Session:19 Macroeconomic Policy Around the World
Critical Thinking Questions
Principles of Macroeconomics 3e | Leadership Development – Micro-Learning Session
Rice University 2020 | Michael Laverty, Colorado State University Global Chris Littel, North Carolina State University| https://openstax.org/details/books/principles-macroeconomics-3e
23. Demography can have important economic effects. The United States has an aging population. Explain
one economic benefit and one economic cost of an aging population as well as of a population that is very
young.
24. Explain why is it difficult to set aside funds for investment when you are in poverty.
25. Why do you think it is difficult for high-income countries to achieve high growth rates?
26. Is it possible to protect workers from losing their jobs without distorting the labor market?
27. Explain what will happen in a nation that tries to solve a structural unemployment problem using
expansionary monetary and fiscal policy. Draw one AD/AS diagram, based on the Keynesian model, for
what the nation hopes will happen. Then draw a second AD/AS diagram, based on the neoclassical model,
for what is more likely to happen.
28. Why are inflationary dangers lower in the high-income economies than in low-income and middleincome economies?
29. Explain why converging economies may present a strong argument for limiting flows of capital but not for
limiting trade.
one economic benefit and one economic cost of an aging population as well as of a population that is very
young.
24. Explain why is it difficult to set aside funds for investment when you are in poverty.
25. Why do you think it is difficult for high-income countries to achieve high growth rates?
26. Is it possible to protect workers from losing their jobs without distorting the labor market?
27. Explain what will happen in a nation that tries to solve a structural unemployment problem using
expansionary monetary and fiscal policy. Draw one AD/AS diagram, based on the Keynesian model, for
what the nation hopes will happen. Then draw a second AD/AS diagram, based on the neoclassical model,
for what is more likely to happen.
28. Why are inflationary dangers lower in the high-income economies than in low-income and middleincome economies?
29. Explain why converging economies may present a strong argument for limiting flows of capital but not for
limiting trade.