The US increases trade
restrictions with China.
How does this affect Aggregate
Demand and Supply?
What are the corresponding
effects on Unemployment and Inflation as a result?
What fiscal and or monetary
policies would you recommend to bring the economy back to Long Run
Equilibrium?
Why would or why wouldn’t you
support this trade policy?
In answering these
questions, the student should be able to:
Correctly interpret the impact
of the discussed trade policy scenario on aggregate supply & demand.
Use appropriate economic
reasoning in the critique of trade policy scenario.
Correctly identify the given
trade policy scenario’s impact on unemployment and inflation.
Recommend the appropriate
fiscal and or monetary policies, given the trade policy scenario examined.
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