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1. Consider the economic situation in the U.S since 2008 and discuss how supply side and demand side economic may be used to solve the current problems. Also, explain why you believe that these two approaches may or may not work.
2. Provide a numerical example and show how a small deposit at a commercial bank can create a multiple of that of money supply. Explain the role of all parties involved in this process.
3. The Federal Reserve chairperson announced the latest monetary policy on Wednesday, December 12, 2012. Explain what the new policy is and whether it will help (impact) to reduce unemployment substantially and increase economic growth. Explain your answer.
4. Supposed the federal government spends an additional one trillion dollars next year. if the marginal propensity to consume is 0.8: what is the change in GNP? What additional marginal tax rate is needed for the government to collect additional taxes to pay for the additional $ one trillion of expenditures?

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