Economic Policy

This week we will be trying to explain short-run fluctuations in the economy. Why do we have periods of growth, followed by recessions? The Aggregate Demand-Aggregate Supply model will help us explain these fluctuations.

Assignments for this week:

• watch the videos or read Mankiw and Taylor, 'Aggregate Demand and Aggregate Supply', and 'The Influence of Monetary and Fiscal Policy on Aggregate Demand'.
• check your understanding by answering the quizzes
• What is the fiscal policy in your country? what is their monetary policy? (Think about what tools they are using and the data you need to collect) Why is your country following these economic policies? (Make sure to go back to your GDP, inflation and unemployment analysis to explain the policies)

Now that we can explain why the economy fluctuates, we can see how the government and central bank can intervene to try and limit the fluctuations. The two next videos are about monetary and fiscal policy.

Padlet here to share findings.