Reference no: EM133128088

Finally, in class we discussed the modern approach to monetary theory, and explained how monetary theory can impact the macroeconomic variables (GDP, inflation, unemployment, interest rates, etc.). For the final question, I want you to assume that the US government has proposed to pass legislation that ensures that any citizen who is able and willing to work will find employment. This means that, anyone who wants a job is able to go to the "employment office" and gain employment for a wage of $25 per hour up to 40 hours per week.

1. Please use all that you have learned this semester to describe the economic impacts that you envision this legislation would have on the economy. Specifically, make sure to address how this government spending is likely to impact each of the macroeconomic variables: unemployment, inflation, GDP, interest rates.

2. Using what you have learned about sovereign currency, how would the proposed legislation impact the national debt/deficit? What concerns about the money supply or debt levels do you think are important?

3. Finally make a summary as to whether or not you would support this proposed "full employment" policy.