Banking and Monetary Policy

TOPIC IV: Monetary and Fiscal Policy: Short Run and Long Run Effects

OBJECTIVES: 
  1. analyze and explain the short run affects of an expansion/contraction monetary policy.
  2. analyze and explain the long run affects of an expansion/contraction monetary policy.
  3. compare and contrast short run and long run monetary policies.
  4. define, explain and illustrate the meaning of the neutrality of money.
  5. analyze the affects of fiscal policy on interest rates and investment.
  6. compare and contrast the relative effectiveness of monetary and fiscal policy
  7. compare and contrast the Keynesian and Monetarists views of monetary policy.

KEY CONCEPTUAL QUESTIONS

  1. How do changes in money affect real output, the price level, and unemployment?
  2. What is meant by the neutrality of money?
  3. How does fiscal policy affect interest rates and planned investment?