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You are the chief economic advisor of the president of Dreamland. Right now the country has unemployment of 7.5%. The country has suffered a sever recession a few years ago and it is showing some signs of slow growth lateley but a lot of people are still out of jobs. Federal annual budget deficit of $1 tirllion a year and a national debt of $16.5 trillion. It's currency also has lost a lot of value against major foreign currencies creating a backlash from other major trading partners recently. Some manufacturing companies are moving out of the country in search of cheap labor and the ones at home are not doing as good and some big ones like auto are trying to cope well after coming out of bankruptcy. Energy, food and commodity prices are also relatively high and going higher, leading to some inflationary pressure in the economy and the housing market is in trouble with lot of foreclosures leading ot a lot of Bank failures. Dreamland is also facing a huge trade deficit and going through mandatory sequestration. The President needs advice on how to turn things around quickly.
a. Advise the President in detail on what he should do to turn the economy around.
b. What would happen to his attempt to attain a blanaced budget?
c. How would the President tell that his economy is approaching equilibrium or getting better?
B involves the polluters in each region independently negotiating pollution deductions, assuming the other region is not undertaking pollution reduction.
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