Imagine that your Learning Team is a group of economic advisors working for the U.S. president. You have been tasked with evaluating the current state of the U.S. economy and making recommendations on how to improve it.

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Part 1 Analysis and Recommendations:

 

Describe the current state of the following economic factors and analyze how each affects aggregate supply and demand:

 

  • Unemployment
  • Expectations
  • ·         Consumer income
  • Interest rates

 

Develop a set of recommendations for the president regarding government spending and taxes based on the economic factors’ current state.

 

Part 2 Evaluation of Recommendations:

 

Before you submit your recommendations to the president, decide as a team to evaluate the recommendations from different perspectives. Assign half of your team to evaluate the recommendations from a Keynesian perspective and the other half from the Classical perspective. Based on these evaluations, what adjustments will you make to your recommendations, if any?

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