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The United States economy is experiencing a moderate economic
downturn. The Republican President has addressed the downturn using
stereotypical Republican methods. The economy failed to improve
significantly, although there WAS some improvement. During the next
election, the American electorate felt that it was time for a
change in the way Washington was handling our economy and elected a
Democratic President. This new President approached our country’s
macroeconomic instability in a stereotypical Democratic manner.
This new economic policy did not significantly improve the economy
either and the American electorate is extremely unhappy. YOU are
running for President of the United States as an Independent
candidate so that you are not forced into adopting an economic
policy based on partisan reasoning. Assuming that you are very
charismatic and can get all branches and agencies of government to
enact your policies, how would YOU address the problems? Please
explain and use graphs to illustrate the following:
1. The original macroeconomic problem using an AD/AS
2. What policy did the Republican President use to address the
3. Illustrate and explain the results of the Republican’s
policy on AD, AS, and GDP.
4. Illustrate and explain the macroeconomic problem facing the
Democratic President as they took office.
5. What policy did the Democratic President use to address the