The Practical Economy

In the introduction for this course, you were asked you to watch for three things you were curious about the
economy. Use this curiosity as a springboard to preparing a 500 – 600 word exploration (roughly 1-2 pages)
about economic policy.
Given that an economy is experiencing inflation in the 5-6% range and the Federal debt is at an all-time high,
design an economic policy (that uses one or both of fiscal and/or monetary policy) to reduce the rate of
inflation.
Make sure your exploration addresses the following:
Define what fiscal policy is
Explain the strengths and weaknesses of fiscal policy
Define what monetary policy is
Explain the strengths and weaknesses of monetary policy
Given that the actual policy choice is somewhat normative in nature, outline the policy you would choose to use
and justify the policy based on the strengths and weaknesses of your options.
Describe which macroeconomic theory we reviewed you used as a basis to develop your policy.

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