Easily Integrate These Wall Street Journal Articles in Your Class |
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Economic Road Clearing, but the Going Is Slow TOPICS: Financial Crisis, Gross Domestic Product, Labor Markets, Unemployment, Business Cycles, Economic Growth, Economic Outlook SUMMARY: After four years of post-crisis turbulence, the U.S. economy is expected to grow by 2.4% according to a survey of economists, an encouraging sign through both the growth rate itself and the broad consensus of what the next year holds. Overall, economists see few hurdles that could derail the recovery. However, the forecasted growth rate is too low to completely repair much of the damage from the 2008-09 crisis and its macroeconomic aftermath, particularly with respect to labor markets. CLASSROOM APPLICATION: Students learn about the current state of the U.S. economy, as well as future growth trajectories estimated by economists. They can consider growth-improving and growth-reducing scenarios for the national economy, as well as understanding the key drivers for sustained economic recovery. QUESTIONS: Reviewed By: Marc Tomljanovich, Drew University Fed Maps Exit From Stimulus TOPICS: Bond Markets, Economic Growth, Federal Reserve Policy, Interest Rates, Monetary Policy, Quantitative Easing SUMMARY: Federal Reserve officials are laying out their strategy to exit their current stimulus measures. Since fall 2012, the Fed has been buying $85 billion in bonds each month in an effort to push long-term interest rates to historic lows and jump-start the slow-moving U.S. economy. Both the questions of when the Fed starts the dialing back of bond-buying, and how quickly and smoothly the return to "normalcy" is, are of intense interest to both financial markets and economists. CLASSROOM APPLICATION: This article exposes students to quantitative easing, allowing for a comparison with traditional monetary policy tools. It gets students to think about different ways in which the Fed may opt to stop its bond-buying program (e.g. immediate versus gradual), and what the impacts of each alternative would be on the economy and bond markets. Finally, students can ask what the macroeconomic effects of continuing the bond-buying program indefinitely would be. QUESTIONS: Reviewed By: Marc Tomljanovich, Drew University Falling Deficit Alters Debate TOPICS: Budget Deficit, Budgeting, Debt, Deficits, Economic Growth, Fiscal Policy, Government Budgets, Taxation SUMMARY: The U.S. federal budget deficit shrank more than expected in recent months, helped by both a steadily improving economy and changes in tax laws. The deadline for the U.S. debt ceiling being reached has been pushed back by months, giving policymakers more time to devise a long-term plan to improve the national debt problem. However, immense philosophical differences remain between the political parties, and the removal of this sense of urgency to broker a deal means that a compromise is not likely to be reached soon. CLASSROOM APPLICATION: Students learn about the improving finances of the U.S. Federal Government in the short-run, while also learning about the long-term structural debt issues that exist. They can compare and contrast Republican and Democratic solutions for lowering the federal deficit, while also considering whether raising the debt ceiling is a viable policy option. Finally, these issues can also be weighed in the context of the theory of Ricardian Equivalence. QUESTIONS: Reviewed By: Marc Tomljanovich, Drew University RELATED ARTICLES:
ECONOMICS MACRO for the week of 05/16/2013 Fed Maps Exit From Stimulus by Jon Hilsenrath 05-11-13 Click here to view the full article on WSJ.com 1. Why are Fed officials looking to end the central bank's bond-buying program? (a) They want to lower U.S. inflation rates (b) They want to lower short-term interest rates (c) They want the flexibility to take stimulus actions in the event of a financial or economic shock (d) They want to lower the national unemployment rate (e) They want to lower the government budget deficit Falling Deficit Alters Debate by Damian Paletta 05-10-13 Click here to view the full article on WSJ.com 2. The federal debt ceiling, originally projected to be reached by May 19, is now thought by analysts to not be hit until _________, largely due to ___________. (a) October 2013; falling public expenditures (b) May 2015; rising tax revenues (c) May 2015; falling public expenditures (d) October 2013; rising tax revenues (e) August 2014; new bond issuances by the U.S. Treasury Housing Rebound Grows as Prices Climb Sharply by Robbie Whelan 05-10-13 Click here to view the full article on WSJ.com 3. The National Association of Realtors reported that housing prices rose 11.3% on average nationally over the past year, with gains found in 133 of 150 metropolitan areas. Which metropolitan area listed below had the highest percentage increase in home prices? (a) San Francisco-Oakland-Fremont (b) Chicago-Naperville-Joliet (c) Phoenix-Mesa-Scottsdale (d) Boston-Cambridge-Quincy (e) Allentown-Bethlehem-Easton As Yellen Forecast, Inflation Has Remained Below Target by Jon Hilsenrath 05-13-13 Click here to view the full article on WSJ.com 4. Why did Janet Yellen, Vice-chair of the Federal Reserve, believe the central bank's expansionary policies would not cause U.S. inflation to rise? (a) She thought falling import prices would keep inflation rates low (b) She thought lower interest rates would shift the Aggregate Supply curve to the right, lowering price levels (c) She thought oil prices would soon fall worldwide, keeping inflation rates low (d) She believed the Federal Reserve would soon reverse its expansionary monetary policies (e) She thought the U.S. economy had so much slack (unused capacity) that inflation rates wouldn't rise Rare Golden State Gold: a Budget Surplus by Vauhini Vara 05-15-13 Click here to view the full article on WSJ.com 5. How is California governor Jerry Brown proposing to use his state's $1.1 billion budget surplus (the first in ten years)? (a) Put the surplus into a 'rainy-day' reserve fund (b) Enact tax breaks for small businesses (c) Restore funding to social services that had been cut in previous years (d) Enact tax breaks for households (e) Increase public spending rates Subscribing professors can access the answer key for these questions by clicking on this link and entering your Wall Street Journal account number. (Click Here) |
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