Please choose two topics of your choice from Chapters 32-34 and describe in your own words what you learned, providing an explanation of 200 words for each topic.
*Pose two questions on material that is not clear to you from Chapters 32-34. Let’s try to answer each other’s questions to test our own understanding. ( please come up 2 questions for each topic)
Question
1. Describe supply and demand in the market for loanable funds and in the market for foreign-currency exchange. How are these markets linked?
Why are budget deficits and trade deficits sometimes called the twin deficits?
2.What is the theory of liquidity preference? How does it help explain the downward slope of the aggregate-demand curve?
2. Use the theory of liquidity preference to explain how a decrease in the money supply affects the aggregate-demand curve.
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