I. Watch Mr. Clifford Limitless: booms and busts
https://www.youtube.com/watch?v=I7n_NuAZLq8
1. How is the movie Limitless an allegory for the business cycle and the economy?
2. Describe the cause of the 2001 dot.com bubble?
3. What caused the housing bubble of 2008?
4. What two potential bubbles did Clifford identify in 2017?
5. Former Chairman of the Fed, Alan Greenspan coined the term "irrational exuberance" to describe the dot.com bubble. What do you think "irrational exuberance" means?
IL Fed Printing Money: Read the story for the USA Today about the Federal Reserve stimulus package
1. Where does the stimulus package come from?
2. What percent of the national debt did the Fed have before the COVID crisis? Who held much of the Federal debt?
3. President Trump appointed the current Chairman of the Fed. What is his name?
4. What does Libertarian Ron Paul call this current action of the Federal Reserve? Do you agree?
5. What national goals are the job of the Fed? When should they limit their actions?
6. Some economists think the Fed action will cause inflation with this action, while other economists are more afraid of deflation caused by the high unemployment and recession. Which do you think poses a bigger threat to the US right now:inflation or deflation? Explain your answer.
III. Read this Yahoo news story about deflation
https://finance.yahoo.com/news/disinflation-the-next-big-economic-trend-morning-brief-100855635.html
1. Why do some Fed Economists think there is little chance of deflation next year?
Listen to this NPR interview with Secretary of Agriculture, Sonny Perdue (son chicken entrepreneur, Frank Perdue) about the impact of coronavirus.
2. Why doesn't he anticipate food shortages and higher prices next year even though the supply chain to the stores has been disrupted.
3. After reading this, has your opinion of whether the US will face inflationary or deflationary pressures next year changed?
