Since the end of the Great Recession, interest rates have been at historic lows—in some cases, close to zero.
How is expansionary monetary policy, or more specifically a open market purchase, supposed to work? How
do near-zero interest rates limit the ability of expansionary monetary policy to work?
How has the Fed responded to this quandary? That is, what policies has the Fed conducted?
In your opinion, how effective has the Fed’s policy been as a response to the Great Recession? What evidence
can you suggest to support your position? 150 words only
2) Compare and contrast the use of government spending changes versus tax changes as a means of
influencing the course of the economy. Is one or the other preferable in specific situations? Imagine for a
moment that you have two roommates, who each have opposing viewpoints on nearly everything, including
politics and economics. Taylor is adamant that the best way to manage the economy is through tax changes,
while Morgan insists that it’s better to adjust the economy through government spending. What would a
Neoclassical economist say? What would a Keynesian economist say? Which roommate do you agree with,
and why? Find a news article to help support your opinion. Summarize the article and include the link to in your
response.