Answer the following questions fully. Incomplete answers will result in a reduction of the allocated points.
1. Find the statistics for the current (first quarter 2015 numbers) ; Consumer Price Index , GDP growth rate, unemployment rate ( past month), real interest rate, currency, GDP per capita and inflation rate. In a paragraph give your best outlook of the current US economy. At what point in the business cycle do you think we are and why so.

2. Read article 1. How does this affect the Aggregate Demand Curve? Draw the change in the equilibrium GDP.

3. Read article 2 Why is the target inflation rate 2%? What is the basis of the political argument against higher inflation? Why are the conservatives against it? Do you agree with Stanley Fischer? Why or Why not?

4. Read article 4 above. Draw the equilibrium Demand and Supply for Brazil and explain in words
as well as using the graph how an increase in interest rates in the United States could affect the economy of Brazil.

5. Watch the video link above. List at least 4 austerity measures that were implemented in Greece. What is the current economic condition (GDP, unemployment, inflation)? What is the economic argument that the bailouts did not work. List at least two monetary policies that are recommended and explain the issues there are going to be faced with each one of them.
Remember that any monetary policy of Spain affects the rest of Europe due to the one currency
Euro.

6. Discuss both parts from the point of view of a classical economist as well as a Keynesian economist.
In September 2006 the overall CPI fell by 0.5 percent but the core CPI edged higher just enough to make inflation a concern. Draw the AD and AS graph of the economy, label everything. Show the effect of the fall in CPI on your graph.
a. What is the Fed’s most likely response to a situation like this one? Will the Fed tighten or ease? Explain the Fed’s action and its consequences for real GDP and the inflation rate.
b. If the inflation rate rises, what effect will the Fed’s decision to not change the federal funds rate have on the U.S. economy? If the economy slips into recession, what effect will the Fed’s no‐change decision have on the economy?

Answer the following questions fully. Incomplete answers will resul...