dollar, on track for lowest close since late May” was the title of a WSJ article on July 16, 2015:

(Ramage, James. Wall Street Journal, July 16, 2015. Retrieved from http://www.wsj.com)

 

Explain how the Greece Bailout has caused the euro to weaken against the dollar. Use the foreign exchange market graphs to demonstrate.

 

 

 

 

 

 

 

 

 

 

 

 

2. “Mortgage Crises Spread Past Subprime Loans” was a title of a NYTimes article on February 12, 2008.

(Source: Vikas and Louise Story. “Mortgage Crises Spread Past Subprime Loans.” NYTimes, February 12, 2008. Retrieved from: http://www.nytimes.com)

What type of macroeconomic shock does the article represent? Use the macro picture to show the effect on real GDP, the price level, and unemployment. Explain!

3. Show graphically and explain how non-interventionist believe the economy will self-correct in times of demand-deficient unemployment.

4. The following excerpt is taken from a NYTimes article:

 “ The Federal Reserve entered a new era on Tuesday, lowering its benchmark interest rate virtually to zero and declaring that it would now fight the recession by pumping out vast amounts of money….”

(Source: Andrews, Edmund L. and Jackie Calmes. “Fed Cuts Key Rate to Record Lows,” NYTimes, December 16, 2008. Retrieved from: www.nytimes.com.)

 

 

1. What is the Fed’s “benchmark interest rate”?

1. Discuss how the Fed’s action in the article will affect r, I, Y and P.  Use appropriate graphs to demonstrate.