Suppose the U.S. government sends you a large income tax refund. You are not sure what to do with the money, so you ask your two roommates for advice. One roommate tells you that if you want to help the economy, you should save all the money because a country's economic growth depends on the amount of saving by households. The other roommate disagrees and advises you to spend all the money because consumer spending is a major component of gross domestic product (GDP), and your spending would help increase production and create more jobs.
Based on the above scenario, provide your opinions on the following topics:
Which of your two roommates is right?
To address this question, you must justify your answer.
I suggest that you present the pros and the cons of each of your roommates' perspectives. Then, weigh them to assess which perspective you believe to be the most important. Do not forget to take into consideration the current state of the economy in your response.
What can the government do to help long run economic growth?
To address this question, please list and explain more than one of the tools at the disposal of our government. Explain how each government action can help our economy to improve.
What role does technology plays in long run economic growth?
You should be able to easily address this question by expressing your thoughts on the benefits of technology for our economy.
You can choose to provide specific examples of technologies that will significantly impact our lives and our economy in the future.
How is the business cycle related to employment and inflation?
Here, you may consider how employment and inflation can be the cause or the effect of the phases of the business cycle.