Week 2 Lecture 1 Setting and Its Impact on Character This week we see settings ranging from Iran to the Deep South of the United States, and that is merely when it comes to location. Setting includes so many ideas beyond locale. Often when asked to describe the setting of a story, people make that mistake. Setting, as we see from Foster, includes time, season, weather, and countless other smaller ingredients. By defining the time and place for a particular story, we are already narrowing the world and its possibilities. One starts to make assumptions about race, gender, religion, wealth, vehicles, jobs, politics, war, peace, love, etc. As you read the selections this week consider the following: · How the setting creates a feeling or atmosphere, both for you and for the characters in the story. · How the setting and the action of the story work together. · How the setting contributes to understanding the important ideas and themes in the story. Making a few minor adjustments to the story may cause the events to appear unbelievable.  For instance, the end of the twentieth century, versus, the beginning of the twentieth century.  What do you think about changing the race of a character?  Would the story shift….how drastically? The setting of a story often influences the action, or at least works together with what the characters in the story are doing.  A foggy street in East Berlin is much better for the action in a spy thriller.  A rocky landscape on Alpha Centauri, 4.4 light years from Earth, suggests the action you would expect in science fiction much better than any typical street in the United States. Character and setting are often dismissed by readers as just another word for scenery. Add some rain. Add some wind. Tell me what time of day it is. Tell me exactly where this person is standing. Is our black woman accidentally walking past a bar filled with angry members of the Ku Klux Klan? Is our German lover a Nazi? Is our American Soldier storming into a mosque to capture a member of Al Qaeda? Look how much that fine-tuning of setting did to the tales whose plots and characters you still do not know. Consider this: if I kept telling you more and more specific things about the setting, would you begin to limit the possibilities for character? What if I told you our black woman is walking past the Klansmen on the night President Eisenhower forced Alabama to integrate its schools? Are you getting a more limited sense of possibilities for this character? Do you have a better sense of who she is and what could take place in the story than if I merely told you she is a woman in America? Bare in mind, we still do not know her age or what she is doing here. That is only half of the equation. We were generating our notion of character by using setting as our springboard. Authors often do this. They want to tell the story of a time and place. William Faulkner, with the exception of much of his Hollywood screenwriting, was a man who devoted his wr.

1. Week 2 Lecture 1
Setting and Its Impact on Character
This week we see settings ranging from Iran to the Deep South
of the United States, and that is merely when it comes to
location.
Setting includes so many ideas beyond locale. Often when asked
to describe the setting of a story, people make that mistake.
Setting, as we see from Foster, includes time, season, weather,
and countless other smaller ingredients. By defining the time
and place for a particular story, we are already narrowing the
world and its possibilities. One starts to make assumptions
about race, gender, religion, wealth, vehicles, jobs, politics,
war, peace, love, etc.
As you read the selections this week consider the following:
· How the setting creates a feeling or atmosphere, both for you
and for the characters in the story.
· How the setting and the action of the story work together.
· How the setting contributes to understanding the important
ideas and themes in the story.
Making a few minor adjustments to the story may cause the
events to appear unbelievable. For instance, the end of the
twentieth century, versus, the beginning of the twentieth
century. What do you think about changing the race of a
character? Would the story shift….how drastically?
The setting of a story often influences the action, or at least
works together with what the characters in the story are doing.
A foggy street in East Berlin is much better for the action in a
spy thriller. A rocky landscape on Alpha Centauri, 4.4 light
years from Earth, suggests the action you would expect in
science fiction much better than any typical street in the United
States.
Character and setting are often dismissed by readers as just
another word for scenery. Add some rain. Add some wind. Tell
me what time of day it is. Tell me exactly where this person is

2. standing. Is our black woman accidentally walking past a bar
filled with angry members of the Ku Klux Klan? Is our German
lover a Nazi? Is our American Soldier storming into a mosque
to capture a member of Al Qaeda? Look how much that fine-
tuning of setting did to the tales whose plots and characters you
still do not know.
Consider this: if I kept telling you more and more specific
things about the setting, would you begin to limit the
possibilities for character? What if I told you our black woman
is walking past the Klansmen on the night President Eisenhower
forced Alabama to integrate its schools? Are you getting a more
limited sense of possibilities for this character? Do you have a
better sense of who she is and what could take place in the story
than if I merely told you she is a woman in America? Bare in
mind, we still do not know her age or what she is doing here.
That is only half of the equation. We were generating our notion
of character by using setting as our springboard. Authors often
do this. They want to tell the story of a time and place. William
Faulkner, with the exception of much of his Hollywood
screenwriting, was a man who devoted his writing to the South.
Why? Because that is where he was from. Marjane Sartrapi is
writing about personal experience, as well. “Write what you
know” often proves to serve writers best.
However, what if someone has come up with a character first.
The personality is entirely fleshed out. The physical description
is so perfect that you swear you could describe the character to
a police sketch artist and the author would beam with pride
when she saw the outcome. But where and when do they exist?
The world around a character determines a character’s fate as
much as the events of the plot.
Each of the stories we are reading this week present characters
in very specific settings. Think about the ripple effect of sliding
the time forward or backward when reading each of these tales.
Spin the globe beneath the characters’ feet a few hundred miles
in any direction. Alter the weather. Lower the sun. Is the person
the same? Can the story be the same?

3. Week 2 Lecture 2
Spiegelman and Sartrapi – Graphic Novels as Short Stories
I have tried simply referring to “Prisoner on the Hell Planet: A
Case History” and “The Veil” as “Graphic Short Stories.” The
end result is that people assume they are either lewd or violent.
Thus, until I come up with something better, “Graphic Novels as
Short Stories” will have to do.
When it comes to Art Spiegelman and Marjane Sartrapi, we are
dealing with very different artists and very different writers.
The amazing things about writers who have decided to embrace
the visual form is that their first pages – even their first “cells”
(the official term for a comic book or graphic novel frame; it
can be spelled with one or two l’s) – tell us so much. Reading
these stories is entirely different than reading a standard “prose
tale.” There are certainly those of us who look at the first page
of a book and make our judgments based on the size of the font,
the length of the first paragraph, the first word that catches our
eye. It’s true but is that judgment nearly as drastic as the one
you made when you flipped to the first page of or saw the first
cell of “The Veil?”
When it comes to graphic novels, authors are given the
opportunity to juxtapose words and images at every turn.
Though it is next to impossible to read Spiegelman or Sartrapi’s
words at the very moment when you are looking at the image,
the experience is as simultaneous as possible. The eye shifts
back and forth from the images to the words. We do not simply
read the words, then look at the picture, then move on. There is
an ebb and flow, a back and forth. Image and language almost
dance with one another. They are inseparable.
Art Spiegelman
In "Prisoner on the Hell Planet: A Case History," Art
Spiegelman describes in horrific detail, through pictures, his
failed effort to overcome his mother's suicide. This dark,
gloomy, depressing cartoon enables Spiegelman to express his
feelings of loneliness, doubt, fear, anger, and blame. This was
also an attempt to express the lack of closure. It is a descriptive

4. essay.
Art Spiegelman also has another story in our collection. He is
the author of the Pulitzer Prize Winning graphic novel Maus.
Spiegelman set out to tell a true story: his father’s surviving a
concentration camp. When Spiegelman sat down to write the
story, he drew a graphic novel where the Jews were mice, the
Nazis were cats, and a variety of animals represented the other
parties of World War II. When people asked Art Spiegelman
how he came to this artistic conclusion, he responded that
telling his story with these images presented the reality more
effectively than concrete descriptions or realistic drawings. To
Spiegelman, what took place during the holocaust was so
beyond the realms of comprehension and description, the only
storytelling method that sufficed was to step as far away from
reality as possible.
In Spiegelman’s “Prisoner on the Hell Planet” we have a son
recently released from a mental hospital, his mother, who is a
Holocaust survivor, and Art’s father, who he refers to as the
“murderer,” in a week where we are studying setting and its
impact on character. Can you extract these characters from their
setting? Are the characters the setting? Is the setting the main
character? It is difficult to tell.
Marjane Sartrapi
Marjane Sartrapi is also writing and drawing about the Middle
East. Persepolis, the graphic novel from which “The Veil” is an
excerpt, was made into an Academy Award nominated animated
film only a few years ago. The impact of her story and the way
it has brought the female Iranian experience to light for the rest
of the world is astounding.
In this novel, we have a more traditional plot taking place. It is
also a work of non-fiction, but, rather than being a journalistic
account, “The Veil” andPersepolis as a whole are Sartrapi’s
memoir. What Sartrapi does so masterfully in this brief piece is
present a slice of world history as seen through the eyes of a
child. This first person account leads us through the story and
also addresses us directly. We are not only spoken to through

5. the narration that borders the top of each cell, young Marjane
addresses us directly through dialogue.
The entire tale moves expertly between narration and dialogue,
using each sparingly but providing the reader with precisely the
right about of information. I doubt if you typed up the text from
“The Veil” if it would be much longer than a page. And yet,
there is so much more happening here than a page worth of
story. This elaborate plot explains, through images and words, a
key moment in Marjane Satrapi’s life and the ripple effects of
this historic event on her friends and multiple generations of her
family. That is an amazing thing to accomplish with a page
worth of words. We truly get to know this character. We travel
through her life. We follow her through her dreams. We meet
God! All that in six pages. Imagine if this story were only the
words: think of the impact it would lose.
Look at the first two cells of the first page. Cell one: we meet
the individual. Cell two: we see how the veil obscures that
individual’s identity. Could that have possibly been explained
more effectively with language? Consider how even in these
first two cells we see the impact of the veil on Marjane Sartrapi.
This individualistic voice will guide us through the tale, yet, by
the time we reach only the second image, we have already lost
visual track of which of these young girls is speaking to us –
purely due to the uniformity of the veil. As we read graphic
novel short stories, particularly ones that move from cell to cell
as Sartrapi does, it is vital that we keep track of the
juxtaposition of one image to the next and the story elements
that juxtaposition emphasizes. We are not merely dealing with
the words and images; we are dealing with their connective
relationship to one another as we proceed through the tale.
Week 2 Lecture 3
William Faulkner and Anne Beattie
William Faulkner – “A Rose for Emily”
William Faulkner is considered by some to be the greatest
American author of the 20th Century. Bare in mind, I am going
to point that out about more than one author in our class: that

6. accolade is not reserved for Mr. Faulkner. But being in the
running for greatest author of any century is worthy of note. He
was born in Mississippi and -- even though he traveled the
world and spent a considerable chunk of his life as a
screenwriter of hits like The Big Sleep and To Have and Have
Not – he died in Mississippi. Faulkner’s home was the South.
He knew it well. It was the setting of nearly every piece of
fiction he wrote. Though that may seem narrow and one might
wonder why he didn’t write more about his experiences in other
parts of the world, his descriptions and use of language were
effective enough to win him two Pulitzer Prizes and a Nobel
Peace Prize.
I long debated whether to include this story in the madness
category or whether it worked best in the setting category.
Though this story has great relevance to our illness and madness
unit, ultimately it seems the most powerful literary element in
Faulkner’s tale is setting and its demonstration of emotion and
character. “A Rose for Emily” is such a rich tale, giving readers
the perfect insight into the power of Faulkner’s writing and
what an effective storyteller he was.
Think of the timeline of this story. “A Rose for Emily” is what
is referred to as a “frame narrative.” The story starts in one time
period at one location. We bounce through multiple time periods
and events working our way back to that original location.
Despite its many events and the order and manner in which
Faulkner reveals Emily’s story to the reader, the plot remains
clear and the portrait of his title character only increases with
detail. We start knowing virtually nothing about this woman. By
the end, she could not be a more specific character. This does
not mean there aren’t endless questions about Emily, her
motives, or her lifestyle. Of course there are! But would you
ever confuse this character with anyone else?
The mystery character is the narrator. To some extent this voice
sounds as if he speaks for the town. He uses collective pronouns
that seem to express not only his opinion, but also the
communal mindset of Jefferson. This rendition of the story,

7. according to our narrator, is not merely his account: it’s the tale
a group has agreed upon. But why does Faulkner use this
technique? Why not simply tell the story from a third person
omniscient point of view? Why not simply tell the story from a
specific character’s point of view? Could it be that using this
collective narrating voice was Faulkner’s expert way of turning
the entire town into one voice?
Setting is obviously crucial to this story, as it is to any tale.
Faulkner’s familiarity with the South and his ability to paint
pictures of locations with extreme specificity bring the story to
life. One of our essay topics will be about setting and character
in “A Rose for Emily,” thus you can explore the topic more
there. But this specific town and time tell us such a great deal
about who this character was. She is dead at the start of the
story. We get to hear so little from her own mouth when we
journey into her past. And yet, through the setting and a couple
of distinct moments this person jumps off the page as a rich
character full of life. Consider how much setting breathed life
into this character.
Anne Beattie – “Snow”
From Faulkner’s Jefferson to Anne Beattie’s home in the
country: what a grand shift of setting between these two tales.
What starkly different authors with surprisingly different
writing styles.
With Joe Sacco, it seemed as if he were writing a travel
brochure. Here, with Anne Beattie, we have a directly addressed
account of a relationship, where the narrator blasts the recipient
over his ideas of their relationship and what took place between
them. Rather than exploring the elaborate plot of “A Rose for
Emily” or “The Veil,” rather than revealing a tragic part of the
world like “Refugeeland,” Anne Beattie has used a continuous
stream of descriptive settings to explain the contents of her
heart.
We must always consider what the author is attempting to do
with his or her story. Telling a tale is not always the only point.
If I were to ask you to summarize the plot of “Snow,” I

8. wouldn’t be surprised if you shrugged or if you had the opposite
reaction and ended up giving me a summary that is longer than
Ms. Beattie’s mere page and a half tale. But what were her
intentions? Answering that question seems to get to the point of
“Snow” far more than asking what took place. The intentions
have far more to do with what “Snow” is about than the events
do. Yet look at the way in which Anne Beattie chose to express
those intentions. She could have ranted and raved about
emotions. She could have described the man who is no longer
here. Instead, she opted to use setting to express everything.
She even shows the disagreement between the narrator and her
former lover by pointing out how he would have recounted the
setting differently. Why not tell us what he thought of the
relationship? Why not explain to us why he left? Why not give
us the dialogue from the final argument between these two
lovers?
Could it be because that this account answers far more than a
direct retelling of the relationship ever could demonstrate?
It’s a bizarre story, experimental even. But it has a certainly
loveliness to it. The sentence -- “Even now, saying ‘snow’ my
lips move so that they kiss the air” (Charters 75) – carries so
much weight. What a perfect way to encapsulate remembering
this particular lover. What a beautiful way to describe that there
is no one for her to kiss. What a masterful way to have a
character speak about setting to demonstrate where she once
was and where she is now.
Last modified: Tuesday, November 22, 2016, 8:52 AM
Years 2000-2010
Joshua Taylor
ECO 202
Milestone Two

9. ECO 202
1
Fiscal Policy
Contractionary Fiscal Policy leading into the 2000’s in the
Clinton Administration
Raised Taxes
Cut spending by reforming TANF program
Implemented NAFTA
Expansionary Fiscal Policy starting in 2001 with President Bush
Tax relief for recession
ECO 202
During the time with Bill Clinton, he implemented
contractionary fiscal policy. He raised taxes across the board,
cut spending by reforming the TANF program, and implemented
NAFTA (Amadeo, 2017). Early in the decade, President Bush
used expansionary fiscal policy to help the economy during
recession 2001
2
Fiscal Policy Actions
This rubric element wants you to examine what the fiscal policy
initiatives were going forward to respond to the changing
economic landscape.
You should specifically state what the intent of the actions
was—for instance, it could be to decrease unemployment.
Then, use our macroeconomic principles and models (like the
AD-AS model or Keynesianconsumptionfunction) to explain

10. why the action would lead to the outcome desired by the
government.
Keep the main points (and any use of graphs to show the
economic models) on the slide, and use the speaker notes to add
full explanation.
Scholarly research is required here as well (this may overlap
with research from the previous element, as appropriate).
ECO 202
3
Fiscal Policy Impact
After looking at what the government set out to do and why,
you will now examine whether it actually worked.
You will look at the macroeconomic data (which you already
gathered in Milestone One) to see if policy actions achieved
their goals. For instance, President Johnson’s “War on Poverty”
aimed to reduce poverty in the U.S. and, in doing so, create a
stronger economy. With less poverty, we should see increased
consumption and higher growth rates.
Keep in mind that there may be times when the government
misread the economy and implemented a policy that had
unintended effects, so it is important to compare what was
observed after the policy in the macroeconomic data to what the
policy objectives were.
ECO 202
References
Amadeo, K. (2016, October 19). What Was Obama's Stimulus
Package? Retrieved January 19, 2017, from
https://www.thebalance.com/what-was-obama-s-stimulus-
package-3305625
Amadeo, K. (2017, January 21). Compare Obama vs Bush on

11. Economic Policies and the Debt. Retrieved January 28, 2017,
from https://www.thebalance.com/how-do-obama-and-bush-
compare-on-their-economic-policies-3305622
Amadeo, K. (2017, January 21). President Bill Clinton's
Economic Policies. Retrieved January 27, 2017, from
https://www.thebalance.com/president-bill-clinton-s-economic-
policies-3305559
Dubay, C. S. (2013, February 20). The Bush Tax Cuts
Explained: Where Are They Now? Retrieved January 28, 2017,
from http://www.heritage.org/research/reports/2013/02/bush-
tax-cuts-explained-facts-costs-tax-rates-charts
ECO 202
5
ECO 202
The 2000 – 2010 American Economy
A Macroeconomic Look
Karla Wilbur
ECO 202
Milestone One
Choose a title for your presentation.
Include your name, the course name and the assignment name.
*

12. ECO 202
2000-2010 American Economy Overview
The early 2000s began with the burst of the dot-com
bubble. In March of 2000, many of these overvalued dot-com
businesses went under, causing the stock market to crash. GDP
growth slowed from 4.1% in 2000 to 1.0% in 2001. Thus began
a recession with unemployment steadily climbing each year to a
high of 6% in 2003. During this time, America was dealt a
blow in the form of a major terrorist attack. The World Trade
Center in New York City was brought down by planes hijacked
by members of al-Qaeda, based in Afghanistan. Americans,
seeking revenge, overwhelming supported the government’s
decision to wage war with al-Qaeda. This set in motion a chain
of wars that would cost the government billions of dollars and
thousands of American lives.
In an effort to lead the United States out of its recession,
the Federal Reserve lowered interest rates from 6.5% at the
beginning of 2001
to 1.75% in December 2001. Suddenly, mortgage rates became
ideal and Americans were encouraged to borrow and to buy. As
it became easier to borrow money, more people were entering
the market and the median price of homes began to increase.
Businesses were flourishing and unemployment rates dropped to
4.3% by 2007.
As with the dot-com bubble, the housing bubble could not
be sustained. Americans who had borrowed against the value of
their home when it was high found themselves unable to repay
what they owed, even if they sold their property. Subprime
loans left many lenders, like Frannie Mae and Freddie Mac, on
the verge of bankruptcy.
In response to the financial crisis, the Emergency
Economic Stabilization Act was proposed, allowing the United

13. States Secretary of Treasury to spend up to $700 billion to
purchase distressed assets, especially mortgage-backed
securities, and to supply cash directly to the banks. On
September 29, 2008, the bill went before the House of
Representatives and was voted down. In response, the DOW
fell 777.68 points which was the highest single day drop in
history. After some revisions, the bill was signed into law on
October 3, 2008.
In February 2009, in an effort to stimulate the economy,
lawmakers enacted the American Recovery and Reinvestment
Act. The purpose of this act was to provide funds to states and
localities, support people in need, purchase goods and services,
and provide temporary tax relief for individuals and businesses.
While the effects of this act were not immediately felt before
the turn of the decade, it ended up playing a large role in
creating jobs and pulling the country out of the recession soon
after.
*
ECO 202
2000-2010 GDP Analysis
Source: U.S. Bureau of Economic Analysis
Year
While the chart shows GDP steadily increasing over the years,
the rate of change fluctuated quite a bit during this decade.
Trends in output and growth can be directly tied to a few major
events that caused this decade to be labeled by many as the
“lost decade”. The decade went through many business cycles
facing a recession early on followed by a period of expansion,
and then ending in another recession. Growth slowed from a
4.1% change in 2000 to a 1% change in 2001. 2004 saw the
highest rate of change with 3.8%. When the housing bubble
burst in 2007, GDP growth immediately declined to a 1.8% rate

14. of change. As unemployment began to rise, personal
consumption expenditures, especially on recreation, decreased.
The decade ended with a -2.8% growth rate in 2009.
The burst of the housing bubble in 2007 caused a major
shift in GDP as well. Gross private domestic investment, which
includes real estate purchases, decreased by 30% in 2009
compared to 2006, with the residential sector dropping 53% in
that same time period. The rate of growth for the construction
industry decreased by almost 22% from 2006 to 2009. While
growth slowed many times over the decade, 2009 is the only
year that real GDP actually decreased. Personal consumption
expenditures, gross private domestic investment, and net
exports of goods and services decreased while government
consumption expenditures and gross investment increased.
During this recession, the government tried to increase
employment and stimulate the economy by spending taxpayer
dollars on government projects, like the American Recovery and
Restoration Act of 2009.
*
ECO 202
GDP & the 9/11 Terror AttacksU.S. Stock Market Exchange
closes for SIX days following the attacks on 9/11The DOW
Industrial Average drops 648 points
U.S. tourism and domestic travel declinedDomestic flights
within the U.S. decreased from 56.4 million passengers in
August of 2001 to 30 million passengers in September of 2001.
Military spending increasesThe US enters the War on
Terror.National Defense spending increases
Change in Real GDP from 2000-2003:YearPercentage2000-0.9
%20013.5 %20027.0 %20038.5 %
When the country was attacked on September 11, 2001, the
economy also faced a huge challenge. The Twin Towers in

15. NYC were taken down by planes hijacked by terrorists. The
NYSE and NASDAQ closed for 6 days following the attack, the
longest shutdown since 1933. Upon reopening, the market fell
by 684 points in one trading day. The airline and insurance
sectors experienced the selling of their stocks at a rapid pace.
American Airlines and United Airlines, carriers whose planes
were hijacked during the terrorist attacks, suffered the greatest
loss on Wall Street.
The hijackings also incited fear of flying and tourism and
domestic travel took a sharp decline. Domestic flights in the
USA dropped from 56.4 million passenger enplanements in
August of 2001 to 30 million passenger enplanements in
September of 2001. The end of brought with it a 13.3% decline
in gross output by the American airline industry, followed by
another 6.1% decline in 2002.
The hijackers were members al-Qaeda, which originated
out of Afghanistan. President George Bush vowed to win the
war on terrorism and launched attacks that would result in two
wars throughout the remainder of the decade. This resulted in a
sharp increase in national defense spending. Government
consumption expenditures for national defense increased by
3.5% of real GDP in 2001 and continued to increase each year.
2003 had the highest rate of change at 8.5% of real GDP when
American entered into its second war of the decade with Iraq.
*
ECO 202
GDP & the Housing BubbleIndustryPercentage of Job
LossMortgage 54.5 %Wood Product Manufacturing35.0
%Cement & Concrete Manufacturing24.4 %
In 2007, the housing bubble burst. Americans who had
borrowed against the value of their home when it was high
found themselves unable to repay what they owed, even if they

16. sold their property. Foreclosure filings spiked by more than
81% in 2008. The total of 861,664 families who lost their
homes in 2008 is a 225% increase from 2006.
The rate of growth for the construction industry decreased
by almost 22% from 2006 to 2009. As the demand for housing
fell, industries that relied heavily on revenue from residential
construction had to lay off workers. Employment in the
mortgage industry decreased by 54.5% from 2006 to 2009. In
the same period of time, there was a 35% loss of employment in
wood product manufacturing and a 24.4% loss of employment in
cement and concrete product manufacturing.
*
ECO 202
Unemployment and Inflation
Source: U.S. Bureau of Economic Analysis
Unemployment rates between 2000 and 2010 follow the
business cycle. When the economy is growing, jobs are
evolving and unemployment is declining. As more people are
employed, personal consumption increases, and the consumer
price index rises. Frictional and structural unemployment play a
role as workers look for jobs and businesses work to find the
right employees for their organizations. However, cyclical
unemployment is likely responsible for the numbers above.
From 2003 through 2007, unemployment decreased as demand
throughout the nation grew. During the financial crisis leading
into the Great Recession, demand decreased, resulting in a
higher rate of unemployment.
The inflation rate is higher when unemployment is lower,
and vice versa. With more money to spend, consumers purchase
more and the inflation rate rises.
*

17. ECO 202
Unemployment & Inflation
The Dot-Com BubbleInvestors assume online businesses
will be successfulMany e-commerce sites go to market with IPO
and stock prices double, triple, and even quadruple in one
day.2000 – Many over-valued dot-com businesses failLeads to
three year recessionUnemployment rises2001: 4.4%2002:
5.8%2003: 6.0%Federal Reserve lowers interest rates6.5% to
1.75% in 2001Borrowing increases and the economy grows.
Inflation begins to increase over next three years.
When the economy is growing, jobs are being created and
more people are employed. As more people are employed,
personal consumption increases, and the consumer price index
rises. No matter how much a nation thrives, you will never see
unemployment at 0%. Frictional and structural unemployment
will always play a factor as workers look for jobs and
businesses struggle to match candidates to the right roles within
their organization. However, cyclical unemployment is likely
responsible for chart above. From 2003 through the beginning
of 2007, cyclical unemployment decreased as demand
throughout the nation grew. During the financial crisis leading
into the Great Recession, demand decreased, resulting in a
higher rate of unemployment.
*
ECO 202
Interest Rates 2000-2010Interest rates decline
during periods of recession and increase during periods of
economic growthInterest rates change in response to demand for

18. credit, growth, and inflationLower interest rates mean
consumers spend more and save less. 2009 – CPI fell deflation
rate of 0.36%The value of the dollar decreasedImports
decreased by 23%
This chart shows two periods of time when interest rates
declined sharply, both during recessions. During the recession
from 2001-2002, interest rates fell from 9.5% to 4.3% and the
rate of inflation slowed from 3.3% in 2000 to 1.5% in 2002.
During the Great Recession of 2008-2009, interest rates
decreased again from 8.3% to 3.3%. The major difference
between this recession and the one earlier in the decade was that
instead of growth slowing down, the country actually
experienced negative growth and a period of deflation. The
GDP declined by 2.8% in 2009. During the same year, the rate
of inflation was -0.36%, or “deflation.”
When interest rates are lowered, consumers are enticed to
spend more and save less. In response to more demand for
credit, interest rates are raised. This can be clearly seen in the
chart above for the period between 2004 and 2007. During
these years, the GDP was steadily growing as well.
Additionally, as the housing bubble burst and the demand for
credit decreased, interest rates plummeted, directly affecting the
GDP in 2009.
*
ECO 202
Fiscal Policy and the New Millenium
1991 - 1992: Growing Deficit
1993: The Omnibus Budget Reconciliation Act enacted.
Raised taxes on wealthy
Raised gas tax
Extended limits on discretionary spending

19. Mandatory spending cut
1994 - 1997: Deficit begins to decrease
1998: Government runs first surplus since 1969.
$69.3 billion
Surplus continues to grow
1999: $125.6 billion
2000: $236.2 billion
Source: The White House – Office of Management and Budget
Fiscal policies have undergone many major changes in the
United States, most commonly at the federal level. Just five
months before President Clinton’s 1993 budget bill was passed,
the Congressional Budget Office projected a 1998 deficit of
$360 billion. One month after the bill was signed into law, the
new estimate was down to just $200 billion. The Omnibus
Budget Reconciliation Act of 1993 raised taxes on wealthy
people, raised the gas tax, extended limits on discretionary
spending and cut back on some mandatory spending. The CBO
explained the dramatic improvement this way: “For the first
time in two and one-half years, the deficit projections have
taken a decided turn for the better. The reconciliation act is the
reason for the improvement over the long run.” In 1998, the
government ran a budget surplus for the first time since 1969.
This surplus increased by 81% in 1999 and by another 88% in
2000. Judging by these events and changes to fiscal policy, we
can assume that the decade was headed in the right direction.
*
ECO 202
Fiscal Policy
The Economic Growth & Tax Relief Reconciliation Act (2001)
The Bill’s Purpose

20. Tax cuts
Stimulus money given to consumers
The Bill’s Goal
Encourage consumer spending
Fund the economy in the short term
The Bill’s Outcome
Economy is coming out of recession
Federal receipts decrease 12%
Federal outlays increase 21%
Source: The White House – Office of Management and Budget
After the burst of the dot-com bubble, the economy
quickly began to slide into a recession. In response, Congress
and President George W. Bush passed The Economic Growth
and Tax Relief Reconciliation Act of 2001 (EGTRRA). This
expansionary policy enacted wide-spread income tax cuts that
reduced tax liabilities for almost every tax return. It initially
helped the suffering economy by stimulating spending during
the 2001 recession. It also gave income tax relief to families
who would spend their money, further stimulating the economy.
This increase in demand helped boost the economy and pull it
out of recession. As shown in the chart above, Government
receipts decreased by 12% between 2000 and 2003 while outlays
increased by 21% in the same time. This resulted in the end of
the budget surplus, leading the United States into the greatest

21. deficit in history and a deficit we still find our country in today.
*
ECO 202
Fiscal Policy
The American Recovery & Reinvestment Act (2009)
Source: The White House – Office of Management and
BudgetThe Bill’s Purpose Individual tax cutsDirect relief to
state governments and individualsExtended unemployment
insurance, health coverage, and food stampsInvestments in
environmental protection and infrastructure
The Bill’s Negative EffectsContributed to largest deficit in
history
$1.4 trillion
The Bill’s Positive EffectsIncreased GDP 2.5%Created 2.3
million jobsDecreased unemploymentPrevented recession from
becoming a full-blown depression
President Obama enacted the American Recovery and
Reinvestment Act of 2009 (ARRA). This expansionary policy
was in response to the recession brought on by the bursting of
the housing market, discussed in slide 5. America was facing
the worst economic and financial crisis since the Great
Depression. In 2008, we saw the loss of trillions of dollars of
household wealth and 4.6 million private sector jobs and GDP
was rapidly falling. The act, signed into law on February 17,
2009, included individual income tax cuts, direct relief to state
governments and individuals, extending unemployment
insurance, health coverage, food assistance programs, and
investments in transportation, environmental protection, and
other infrastructure that were thought to provide long-term
economic benefits.
This increase in government spending combined with a

22. decrease in taxes created the largest deficit the United States
had ever seen at $1.4 trillion. However, it contributed to
stimulating the economy, increasing the GDP, and prevented the
recession from becoming a full-blown depression. The increase
in government spending had a multiplier effect in subsequent
transactions as it passed through the broader economy.
According to Congressional Budget Office, the act raised the
nation's GDP from 2% to 2.5% between the fourth quarter of
2009 and the second quarter of 2011. The CBO also estimates
that the act was directly responsible for the creation of 2.3
million jobs in 2010. Government spending created new jobs,
business tax relief allowed more companies to retain and/or hire
workers and individual tax breaks and extended unemployment
benefits put more money back in the pockets of consumers.
*
ECO 202
Calculating Inflation
Changes throughout the Decade2000 and Prior:
Consumer Price Index (CPI)
2000-2004: Personal Consumption Index (PCE)
2004-Current:
Core-PCE (excluding prices of food and energy)
Sometimes, monetary policies can help the Federal Reserve
achieve one goal, while simultaneously impeding its other
goals. When the Federal Reserve feels as though inflation is
increase at an alarming rate, it can take action to slow it down.
However, when the Federal Reserve increases interest rates to
reduce the inflation rate, a recession can occur. This causes a
slow in growth in aggregate demand, which can increase
unemployment and decrease GDP.
One major change that took place regarding monetary policy

23. was in regards to the way inflation was calculated. Prior to
2000, the inflation rate was always calculated by the Consumer
Price Index (CPI). However, in 2000, the Chairman of the
Federal Reserve, Alan Greenspan, began using the Personal
Consumption Expenditure (PCE) to calculate the rate of
inflation instead. PCE is the measurement of all goods and
services consumed in the United States, including purchases
made by consumers, employers, and federal programs.
Chairman Greenspan argued that the PCE was more
comprehensive and would be more consistent in the long run by
more easily allowing revisions to be taken into account.
In 2004, Chairman Greenspan again changed the way inflation
was calculated by removing the cost of food and energy. The
belief was that the price of food and energy fluctuated by causes
unrelated to general inflation and that these prices count not be
controlled by monetary policy. The Federal Reserve began
using the core-PCE price index to calculate inflation. The core-
PCE is defined as “personal consumption expenditures (PCE)
prices excluding food and energy prices” (The Bureau of
Economic Analysis, 2016). As you can see in the chart above,
there is a major difference between CPI, PCE, and core-PCE.
While both CPI and PCE were showing the economy was in a
significant period of deflation from the end of 2008 through the
beginning of 2009, core-PCE continued to show a rate of
growth.
*
ECO 202
Monetary Policy
The New Millenium1990 – 2000 was a period of relatively
stable economic growth, inflation rate, and joblessnessCBO’s
forecast for 2000-2009 shows anticipated continual growth
(report released January 1999)

24. GDP growth rate: 2.3% average per year
Inflation rate: 2.6% average per year
Unemployment rate: 5.7% average per yearMonetary policies
are based off of forecasted information
Both upcoming recessions were unanticipated
The Federal Reserve has the right to act “so as to promote
effectively the goals of maximum employment, stable prices,
and moderate long-term interest rates”. They have four main
goals: to establish price stability, to maintain high levels of
employment, to ensure the stability of financial markets and
institutions, and to encourage stable economic growth. The
actions that the Federal Reserve takes to achieve these goals are
monetary policy.
The federal funds rate is the interest rate at which banks
lend money to other banks in order to meet the required reserve.
These loans are usually very short term and often happen
overnight. Although the Federal Reserve can not actually set
the federal funds rate, it does have the ability to manipulate it
indirectly. This is done by raising or lowering the discount rate
at which the Federal Reserve loans money. Essentially, if the
Federal Reserve lowers the discount rate below the federal
funds rate, banks would be more likely to borrow from the
Federal Reserve when they need money. This causes the federal
funds rate to decrease in order to compete. However, if the
discount rate is above that of the federal funds rate, banks will
likely choose to borrow from each other instead, causing the
federal funds rate to increase. Therefore, the discount rate and
the federal funds rate usually rise or fall together.
The chart above shows the effective federal funds rate
from 1995 through the end of 1999. While the rate spiked and
dipped throughout these years, it remained fairly stable. This is
a direct reflection of the stability in economic growth, the
inflation rate, and joblessness that occurred throughout these
years. Because the Federal Reserve’s essential function is to
stabilize output, employment, and inflation, the 1990s were

25. arguably a relatively easy decade for the Federal Reserve to
handle. In January of 1999, the Congressional Budget Office
(CBO) released a report outlining the economic and budget
outlook for the years 2000 through 2009. In it, they forecasted
that the GDP would grow by an average of 2.3% per year,
inflation as measured by the consumer price index would
increase by 2.6% per year, and that unemployment would
average 5.7% per year. The Federal Reserve can only enact
monetary policies based on forecasted information.
Because the forecast leading into the next decade showed
continual growth, the Federal Reserve had no way of knowing
that two recessions were on the horizon.
*
ECO 202
Monetary Policy
The Housing Bubble Monetary Policy:
Federal Reserve lowers interest rates from 6.5% to 1.75% in
2001
Goals:
Increase the money supply
Increase borrowing
Increase spending
Stimulate the economy
Negative Effects:
Higher demand leads to increase housing pricesBetween 2000 to
2006Housing prices increase over 200%Rental prices increase
only 25%The housing bubble is createdLower interest rates
allowed for subprime lending,
creating a financial crisis when borrowers
could not repay

26. Positive Effects: Lower interest rates result in banks lending
more and consumers borrowing moreMore first-time home
buyers could obtain mortgagesHousing market
boomedEmployment related to the housing/construction
industry thrived
After the dot-com bubble burst, the economy experience a slight
recession. This situation was compounded by the terrorist
attacks in New York City on September 11, 2001. In an effort
to stimulate spending, the Federal Reserve lowered interest
rates from 6.5% at the beginning of 2001 to 1.75% in December
2001, applying downward pressure to the federal funds rate.
Changes in the federal funds rate affects banks, which in turn
affect mortgage rates. Historically low mortgage rates enabled
more first-time homebuyers to obtain mortgages and enter the
housing market. With so many consumers in the housing
market, housing prices soared and employment related to the
housing/construction industry thrived. The rate of
unemployment in the construction industry decreased from 14%
in January of 2003 to 4.5% in October of 2006. The gross
output in the housing industry increased by 68% in the same
time frame.
However, this monetary policy had negative effects as
well. These low interest rates created capital liquidity allowing
for banks to provide borrowers with the necessary funds to buy
a home. There were many people who wanted to invest in a
home but were excluded from securing favorable financing due
to the underwritten guidelines used by the prime loan mortgage
companies. The increase in capital coupled with the increase in
demand for mortgages led most prime rate mortgage companies
to relax their guidelines. Subprime mortgages are defined as a
“type of loan granted to individuals with poor credit histories
(often below 600), who, as a result of their deficient credit
ratings, would not be able to qualify for conventional
mortgages”. (Investopedia, 2016). At the time, lenders saw
subprime mortgages as less risky than they were. Rates were

27. low, the economy was thriving and borrowers were making
payments on time. The size of the subprime loan market rapidly
increased. In 1995, it was estimated that there were $65 billion
in subprime mortgages. However, by 2007, of the $10 trillion
in outstanding mortgages, subprime mortgages accounted for
$1.3 trillion.
Typically, rental prices and housing prices increase at
about the same rate. However, with the increase in demand for
homes, housing prices began to surge. The graph above shows
the correlation between housing prices and rental prices. As
you can see, they remain very close together until 2001 when
housing prices begin to drastically increase. From 2000 to
2006, housing prices increased by over 200% while rental prices
increased by only 25% in the same time frame.
These events eventually led to the bursting of the housing
bubble and the Great Recession.
*
ECO 202
Monetary Policy
Bank Reserves
2008 Federal Reserve pushes target for federal funds rate to
nearly zero Federal Reserve begins paying 0.25% interest on
bank reserves
Goals:Increase reserves to meet demandBanks would lend
reserves to households and firmsIncrease spendingStimulate
failing economy
Results:Banks hesitant to lend moneyBanks begin stockpiling
reserves instead of lending to households and firmsTotal bank
reserves rise from < $50b in
2008 to > $900b in 2009

28. Before the Great Recession, Congress passed the Financial
Services Regulatory Relief Act of 2006. This act authorized the
Federal Reserve to begin paying interest to banks on the balance
of their reserves. Although this legislation wasn’t supposed to
go into effect until October 1, 2011, the financial crisis
prompted quicker action. The failure of many high profile
financial institutions in September of 2008 caused a huge sense
of instability in the financial system. The Emergency Economic
Stabilization Act of 2008 authorized the Federal Reserve to
begin paying 0.25% interest on reserve balances. According to
the Board of the Federal Reserve, “the payment of interest on
excess reserves will permit the Federal Reserve to expand its
balance sheet as necessary to provide the liquidity necessary to
support financial stability while implementing the monetary
policy that is appropriate in light of the System’s
macroeconomic objectives of maximum employment and price
stability.”
The intention behind the interest payments was to increase
bank reserves and avoid a potential bank run. The Federal
Reserve was hoping that banks would then lend these reserves
to households and firms. These households and firms would
then spend the money, stimulating the economy, increasing
jobs, and raising GDP. However, banks were hesitant to loan to
anyone without stellar credit and once the Federal Reserve was
authorized to pay interest on reserves, the amount of money
banks kept in their reserves began to increase dramatically. As
you can see in the chart above, reserve balances with Federal
Reserve banks hovered consistently at just below $50 billion
from 2000 through 20008. As indicated by the jagged peaks,
once these reserves began earning interest, banks began
stockpiling excess reserves instead of loaning out these funds.
By 2009, Federal Reserve banks balances were over $900
billion.
*

29. ECO 202
ReferencesBureau of Economic Analysis. (2016). National Data.
Retrieved from http://www.bea.gov/iTable/index_nipa.cfm
Federal Reserve Bank of New York. (2016). Term Asset-Backed
Securities Loan Facility. Retrieved from
https://www.newyorkfed.org/markets/talf.html
Focus Economics. (2016). U.S. Economic Outlook. Retrieved
from http://www.focus-economics.com/countries/united-states
Geier, Ben. (2015, March 12) What did we learn from the
dotcom stock bubble of 2000? Time. Retrieved from
http://time.com/3741681/2000-dotcom-stock-bust/
Board of Governors of the Federal Reserve System. (2015,
November 24). Term Asset-Backed Securities Loan Facility.
Retrieved from
https://www.federalreserve.gov/monetarypolicy/talf.htm
Board of Governors of the Federal Reserve System. (2016).
Bank Prime Loan Rate. Retrieved from
https://fred.stlouisfed.org/series/MPRIME
White House, The. (2016). Historical Tables. Office of
Management and Budget. Retrieved from
https://www.whitehouse.gov/omb/budget/Historicals
*
ECO 202
References ContinuedHubbard, R. Glenn & O’Brien, Anthony
Patrick. (2015). Macroeconomics. Pearson Education Inc.
Retrieved from https://view.ebookplus.pearsoncmg.com
Feldstein, Martin. (2002). Tax Cuts, Rate Cuts Put the Economy
Back on Track. Wall Street Journal Online. Retrieved from
http://www.nber.org/feldstein/wj031302.pdf

30. Meth, Madeline. (2011, March 7). RELEASE: The Real Heroes
of the 1998 Budget Surplus: Clinton and His Economy. Center
for American Progress. Retrieved from
https://www.americanprogress.org/press/release/2011/03/07/143
49/release-the-real-heroes-of-the-1998-budget-surplus-clinton-
and-his-economy/
Nesvisky, Matt. (2001, December 1). U.S. Monetary Policy
During the 1990s. The National Bureau of Economic Research
Digest. Retrieved from
http://www.nber.org/digest/dec01/w8471.html
Prante, Gerald. (2013, November 4) A Distributional Analysis
of Fiscal Policies in the United States, 2000-2012. Tax
Foundation. Retrieved from
http://taxfoundation.org/sites/taxfoundation.org/files/docs/wp9_
sr211_
Redistribution_Working_Paper_2013_0.pdf
Choose a title for your presentation.
Include your name, the course name and the assignment name.
*
The early 2000s began with the burst of the dot-com
bubble. In March of 2000, many of these overvalued dot-com
businesses went under, causing the stock market to crash. GDP
growth slowed from 4.1% in 2000 to 1.0% in 2001. Thus began
a recession with unemployment steadily climbing each year to a
high of 6% in 2003. During this time, America was dealt a
blow in the form of a major terrorist attack. The World Trade
Center in New York City was brought down by planes hijacked
by members of al-Qaeda, based in Afghanistan. Americans,
seeking revenge, overwhelming supported the government’s
decision to wage war with al-Qaeda. This set in motion a chain
of wars that would cost the government billions of dollars and
thousands of American lives.
In an effort to lead the United States out of its recession,
the Federal Reserve lowered interest rates from 6.5% at the

31. beginning of 2001
to 1.75% in December 2001. Suddenly, mortgage rates became
ideal and Americans were encouraged to borrow and to buy. As
it became easier to borrow money, more people were entering
the market and the median price of homes began to increase.
Businesses were flourishing and unemployment rates dropped to
4.3% by 2007.
As with the dot-com bubble, the housing bubble could not
be sustained. Americans who had borrowed against the value of
their home when it was high found themselves unable to repay
what they owed, even if they sold their property. Subprime
loans left many lenders, like Frannie Mae and Freddie Mac, on
the verge of bankruptcy.
In response to the financial crisis, the Emergency
Economic Stabilization Act was proposed, allowing the United
States Secretary of Treasury to spend up to $700 billion to
purchase distressed assets, especially mortgage-backed
securities, and to supply cash directly to the banks. On
September 29, 2008, the bill went before the House of
Representatives and was voted down. In response, the DOW
fell 777.68 points which was the highest single day drop in
history. After some revisions, the bill was signed into law on
October 3, 2008.
In February 2009, in an effort to stimulate the economy,
lawmakers enacted the American Recovery and Reinvestment
Act. The purpose of this act was to provide funds to states and
localities, support people in need, purchase goods and services,
and provide temporary tax relief for individuals and businesses.
While the effects of this act were not immediately felt before
the turn of the decade, it ended up playing a large role in
creating jobs and pulling the country out of the recession soon
after.
*
While the chart shows GDP steadily increasing over the years,
the rate of change fluctuated quite a bit during this decade.
Trends in output and growth can be directly tied to a few major

32. events that caused this decade to be labeled by many as the
“lost decade”. The decade went through many business cycles
facing a recession early on followed by a period of expansion,
and then ending in another recession. Growth slowed from a
4.1% change in 2000 to a 1% change in 2001. 2004 saw the
highest rate of change with 3.8%. When the housing bubble
burst in 2007, GDP growth immediately declined to a 1.8% rate
of change. As unemployment began to rise, personal
consumption expenditures, especially on recreation, decreased.
The decade ended with a -2.8% growth rate in 2009.
The burst of the housing bubble in 2007 caused a major
shift in GDP as well. Gross private domestic investment, which
includes real estate purchases, decreased by 30% in 2009
compared to 2006, with the residential sector dropping 53% in
that same time period. The rate of growth for the construction
industry decreased by almost 22% from 2006 to 2009. While
growth slowed many times over the decade, 2009 is the only
year that real GDP actually decreased. Personal consumption
expenditures, gross private domestic investment, and net
exports of goods and services decreased while government
consumption expenditures and gross investment increased.
During this recession, the government tried to increase
employment and stimulate the economy by spending taxpayer
dollars on government projects, like the American Recovery and
Restoration Act of 2009.
*
When the country was attacked on September 11, 2001, the
economy also faced a huge challenge. The Twin Towers in
NYC were taken down by planes hijacked by terrorists. The
NYSE and NASDAQ closed for 6 days following the attack, the
longest shutdown since 1933. Upon reopening, the market fell
by 684 points in one trading day. The airline and insurance
sectors experienced the selling of their stocks at a rapid pace.
American Airlines and United Airlines, carriers whose planes
were hijacked during the terrorist attacks, suffered the greatest
loss on Wall Street.

33. The hijackings also incited fear of flying and tourism and
domestic travel took a sharp decline. Domestic flights in the
USA dropped from 56.4 million passenger enplanements in
August of 2001 to 30 million passenger enplanements in
September of 2001. The end of brought with it a 13.3% decline
in gross output by the American airline industry, followed by
another 6.1% decline in 2002.
The hijackers were members al-Qaeda, which originated
out of Afghanistan. President George Bush vowed to win the
war on terrorism and launched attacks that would result in two
wars throughout the remainder of the decade. This resulted in a
sharp increase in national defense spending. Government
consumption expenditures for national defense increased by
3.5% of real GDP in 2001 and continued to increase each year.
2003 had the highest rate of change at 8.5% of real GDP when
American entered into its second war of the decade with Iraq.
*
In 2007, the housing bubble burst. Americans who had
borrowed against the value of their home when it was high
found themselves unable to repay what they owed, even if they
sold their property. Foreclosure filings spiked by more than
81% in 2008. The total of 861,664 families who lost their
homes in 2008 is a 225% increase from 2006.
The rate of growth for the construction industry decreased
by almost 22% from 2006 to 2009. As the demand for housing
fell, industries that relied heavily on revenue from residential
construction had to lay off workers. Employment in the
mortgage industry decreased by 54.5% from 2006 to 2009. In
the same period of time, there was a 35% loss of employment in
wood product manufacturing and a 24.4% loss of employment in
cement and concrete product manufacturing.
*
Unemployment rates between 2000 and 2010 follow the
business cycle. When the economy is growing, jobs are
evolving and unemployment is declining. As more people are
employed, personal consumption increases, and the consumer

34. price index rises. Frictional and structural unemployment play a
role as workers look for jobs and businesses work to find the
right employees for their organizations. However, cyclical
unemployment is likely responsible for the numbers above.
From 2003 through 2007, unemployment decreased as demand
throughout the nation grew. During the financial crisis leading
into the Great Recession, demand decreased, resulting in a
higher rate of unemployment.
The inflation rate is higher when unemployment is lower,
and vice versa. With more money to spend, consumers purchase
more and the inflation rate rises.
*
When the economy is growing, jobs are being created and
more people are employed. As more people are employed,
personal consumption increases, and the consumer price index
rises. No matter how much a nation thrives, you will never see
unemployment at 0%. Frictional and structural unemployment
will always play a factor as workers look for jobs and
businesses struggle to match candidates to the right roles within
their organization. However, cyclical unemployment is likely
responsible for chart above. From 2003 through the beginning
of 2007, cyclical unemployment decreased as demand
throughout the nation grew. During the financial crisis leading
into the Great Recession, demand decreased, resulting in a
higher rate of unemployment.
*
This chart shows two periods of time when interest rates
declined sharply, both during recessions. During the recession
from 2001-2002, interest rates fell from 9.5% to 4.3% and the
rate of inflation slowed from 3.3% in 2000 to 1.5% in 2002.
During the Great Recession of 2008-2009, interest rates
decreased again from 8.3% to 3.3%. The major difference
between this recession and the one earlier in the decade was that
instead of growth slowing down, the country actually
experienced negative growth and a period of deflation. The

35. GDP declined by 2.8% in 2009. During the same year, the rate
of inflation was -0.36%, or “deflation.”
When interest rates are lowered, consumers are enticed to
spend more and save less. In response to more demand for
credit, interest rates are raised. This can be clearly seen in the
chart above for the period between 2004 and 2007. During
these years, the GDP was steadily growing as well.
Additionally, as the housing bubble burst and the demand for
credit decreased, interest rates plummeted, directly affecting the
GDP in 2009.
*
Fiscal policies have undergone many major changes in the
United States, most commonly at the federal level. Just five
months before President Clinton’s 1993 budget bill was passed,
the Congressional Budget Office projected a 1998 deficit of
$360 billion. One month after the bill was signed into law, the
new estimate was down to just $200 billion. The Omnibus
Budget Reconciliation Act of 1993 raised taxes on wealthy
people, raised the gas tax, extended limits on discretionary
spending and cut back on some mandatory spending. The CBO
explained the dramatic improvement this way: “For the first
time in two and one-half years, the deficit projections have
taken a decided turn for the better. The reconciliation act is the
reason for the improvement over the long run.” In 1998, the
government ran a budget surplus for the first time since 1969.
This surplus increased by 81% in 1999 and by another 88% in
2000. Judging by these events and changes to fiscal policy, we
can assume that the decade was headed in the right direction.
*
After the burst of the dot-com bubble, the economy
quickly began to slide into a recession. In response, Congress
and President George W. Bush passed The Economic Growth
and Tax Relief Reconciliation Act of 2001 (EGTRRA). This
expansionary policy enacted wide-spread income tax cuts that
reduced tax liabilities for almost every tax return. It initially

36. helped the suffering economy by stimulating spending during
the 2001 recession. It also gave income tax relief to families
who would spend their money, further stimulating the economy.
This increase in demand helped boost the economy and pull it
out of recession. As shown in the chart above, Government
receipts decreased by 12% between 2000 and 2003 while outlays
increased by 21% in the same time. This resulted in the end of
the budget surplus, leading the United States into the greatest
deficit in history and a deficit we still find our country in today.
*
President Obama enacted the American Recovery and
Reinvestment Act of 2009 (ARRA). This expansionary policy
was in response to the recession brought on by the bursting of
the housing market, discussed in slide 5. America was facing
the worst economic and financial crisis since the Great
Depression. In 2008, we saw the loss of trillions of dollars of
household wealth and 4.6 million private sector jobs and GDP
was rapidly falling. The act, signed into law on February 17,
2009, included individual income tax cuts, direct relief to state
governments and individuals, extending unemployment
insurance, health coverage, food assistance programs, and
investments in transportation, environmental protection, and
other infrastructure that were thought to provide long-term
economic benefits.
This increase in government spending combined with a
decrease in taxes created the largest deficit the United States
had ever seen at $1.4 trillion. However, it contributed to
stimulating the economy, increasing the GDP, and prevented the
recession from becoming a full-blown depression. The increase
in government spending had a multiplier effect in subsequent
transactions as it passed through the broader economy.
According to Congressional Budget Office, the act raised the
nation's GDP from 2% to 2.5% between the fourth quarter of
2009 and the second quarter of 2011. The CBO also estimates
that the act was directly responsible for the creation of 2.3
million jobs in 2010. Government spending created new jobs,

37. business tax relief allowed more companies to retain and/or hire
workers and individual tax breaks and extended unemployment
benefits put more money back in the pockets of consumers.
*
Sometimes, monetary policies can help the Federal Reserve
achieve one goal, while simultaneously impeding its other
goals. When the Federal Reserve feels as though inflation is
increase at an alarming rate, it can take action to slow it down.
However, when the Federal Reserve increases interest rates to
reduce the inflation rate, a recession can occur. This causes a
slow in growth in aggregate demand, which can increase
unemployment and decrease GDP.
One major change that took place regarding monetary policy
was in regards to the way inflation was calculated. Prior to
2000, the inflation rate was always calculated by the Consumer
Price Index (CPI). However, in 2000, the Chairman of the
Federal Reserve, Alan Greenspan, began using the Personal
Consumption Expenditure (PCE) to calculate the rate of
inflation instead. PCE is the measurement of all goods and
services consumed in the United States, including purchases
made by consumers, employers, and federal programs.
Chairman Greenspan argued that the PCE was more
comprehensive and would be more consistent in the long run by
more easily allowing revisions to be taken into account.
In 2004, Chairman Greenspan again changed the way inflation
was calculated by removing the cost of food and energy. The
belief was that the price of food and energy fluctuated by causes
unrelated to general inflation and that these prices count not be
controlled by monetary policy. The Federal Reserve began
using the core-PCE price index to calculate inflation. The core-
PCE is defined as “personal consumption expenditures (PCE)
prices excluding food and energy prices” (The Bureau of
Economic Analysis, 2016). As you can see in the chart above,
there is a major difference between CPI, PCE, and core-PCE.
While both CPI and PCE were showing the economy was in a
significant period of deflation from the end of 2008 through the

38. beginning of 2009, core-PCE continued to show a rate of
growth.
*
The Federal Reserve has the right to act “so as to promote
effectively the goals of maximum employment, stable prices,
and moderate long-term interest rates”. They have four main
goals: to establish price stability, to maintain high levels of
employment, to ensure the stability of financial markets and
institutions, and to encourage stable economic growth. The
actions that the Federal Reserve takes to achieve these goals are
monetary policy.
The federal funds rate is the interest rate at which banks
lend money to other banks in order to meet the required reserve.
These loans are usually very short term and often happen
overnight. Although the Federal Reserve can not actually set
the federal funds rate, it does have the ability to manipulate it
indirectly. This is done by raising or lowering the discount rate
at which the Federal Reserve loans money. Essentially, if the
Federal Reserve lowers the discount rate below the federal
funds rate, banks would be more likely to borrow from the
Federal Reserve when they need money. This causes the federal
funds rate to decrease in order to compete. However, if the
discount rate is above that of the federal funds rate, banks will
likely choose to borrow from each other instead, causing the
federal funds rate to increase. Therefore, the discount rate and
the federal funds rate usually rise or fall together.
The chart above shows the effective federal funds rate
from 1995 through the end of 1999. While the rate spiked and
dipped throughout these years, it remained fairly stable. This is
a direct reflection of the stability in economic growth, the
inflation rate, and joblessness that occurred throughout these
years. Because the Federal Reserve’s essential function is to
stabilize output, employment, and inflation, the 1990s were
arguably a relatively easy decade for the Federal Reserve to
handle. In January of 1999, the Congressional Budget Office
(CBO) released a report outlining the economic and budget

39. outlook for the years 2000 through 2009. In it, they forecasted
that the GDP would grow by an average of 2.3% per year,
inflation as measured by the consumer price index would
increase by 2.6% per year, and that unemployment would
average 5.7% per year. The Federal Reserve can only enact
monetary policies based on forecasted information.
Because the forecast leading into the next decade showed
continual growth, the Federal Reserve had no way of knowing
that two recessions were on the horizon.
*
After the dot-com bubble burst, the economy experience a slight
recession. This situation was compounded by the terrorist
attacks in New York City on September 11, 2001. In an effort
to stimulate spending, the Federal Reserve lowered interest
rates from 6.5% at the beginning of 2001 to 1.75% in December
2001, applying downward pressure to the federal funds rate.
Changes in the federal funds rate affects banks, which in turn
affect mortgage rates. Historically low mortgage rates enabled
more first-time homebuyers to obtain mortgages and enter the
housing market. With so many consumers in the housing
market, housing prices soared and employment related to the
housing/construction industry thrived. The rate of
unemployment in the construction industry decreased from 14%
in January of 2003 to 4.5% in October of 2006. The gross
output in the housing industry increased by 68% in the same
time frame.
However, this monetary policy had negative effects as
well. These low interest rates created capital liquidity allowing
for banks to provide borrowers with the necessary funds to buy
a home. There were many people who wanted to invest in a
home but were excluded from securing favorable financing due
to the underwritten guidelines used by the prime loan mortgage
companies. The increase in capital coupled with the increase in
demand for mortgages led most prime rate mortgage companies
to relax their guidelines. Subprime mortgages are defined as a
“type of loan granted to individuals with poor credit histories

40. (often below 600), who, as a result of their deficient credit
ratings, would not be able to qualify for conventional
mortgages”. (Investopedia, 2016). At the time, lenders saw
subprime mortgages as less risky than they were. Rates were
low, the economy was thriving and borrowers were making
payments on time. The size of the subprime loan market rapidly
increased. In 1995, it was estimated that there were $65 billion
in subprime mortgages. However, by 2007, of the $10 trillion
in outstanding mortgages, subprime mortgages accounted for
$1.3 trillion.
Typically, rental prices and housing prices increase at
about the same rate. However, with the increase in demand for
homes, housing prices began to surge. The graph above shows
the correlation between housing prices and rental prices. As
you can see, they remain very close together until 2001 when
housing prices begin to drastically increase. From 2000 to
2006, housing prices increased by over 200% while rental prices
increased by only 25% in the same time frame.
These events eventually led to the bursting of the housing
bubble and the Great Recession.
*
Before the Great Recession, Congress passed the Financial
Services Regulatory Relief Act of 2006. This act authorized the
Federal Reserve to begin paying interest to banks on the balance
of their reserves. Although this legislation wasn’t supposed to
go into effect until October 1, 2011, the financial crisis
prompted quicker action. The failure of many high profile
financial institutions in September of 2008 caused a huge sense
of instability in the financial system. The Emergency Economic
Stabilization Act of 2008 authorized the Federal Reserve to
begin paying 0.25% interest on reserve balances. According to
the Board of the Federal Reserve, “the payment of interest on
excess reserves will permit the Federal Reserve to expand its
balance sheet as necessary to provide the liquidity necessary to
support financial stability while implementing the monetary

41. policy that is appropriate in light of the System’s
macroeconomic objectives of maximum employment and price
stability.”
The intention behind the interest payments was to increase
bank reserves and avoid a potential bank run. The Federal
Reserve was hoping that banks would then lend these reserves
to households and firms. These households and firms would
then spend the money, stimulating the economy, increasing
jobs, and raising GDP. However, banks were hesitant to loan to
anyone without stellar credit and once the Federal Reserve was
authorized to pay interest on reserves, the amount of money
banks kept in their reserves began to increase dramatically. As
you can see in the chart above, reserve balances with Federal
Reserve banks hovered consistently at just below $50 billion
from 2000 through 20008. As indicated by the jagged peaks,
once these reserves began earning interest, banks began
stockpiling excess reserves instead of loaning out these funds.
By 2009, Federal Reserve banks balances were over $900
billion.
*
*
The American Economy
2008 ~ 2018
Latonya Parrish
Eco 202
Milestone one
Southern New Hampshire University

42. 2008: The Global Financial Crisis
More than 25 subprime lenders filed for bankruptcy
2008: Congress Passes $700 Billion Bailout Bill
2009: The unemployment rate rose to 10.0%, the worst since the
1982 recession.
ECO 202 Final Project Guidelines and Rubric
Overview
The final project for this course is the creation of economic
history analysis presentation. Macroeconomics is the part of the
study of economics that is concerned
with the aggregate or the whole. Macroeconomics provides us
with tools and methods to understand how our economy works
as a whole. It deals with
economy-wide issues such as price levels, employment, national
income, and growth. As a student of macroeconomics, you will
learn how to understand the

43. changes occurring throughout our economy and how our
economy is influenced by our decisions, by our government, and
by other countries.
In this assignment, you will perform an in-depth analysis of a
10-year period in U.S. economic history between 1950 and
today. In your analysis, you will examine
macroeconomic data, basic macroeconomic principles,
government actions, and historical/current events to give a clear
and comprehensive picture of your
chosen time period and detail how they are related to one
another.
The project is divided into three milestones, which will be
submitted at various points throughout the course to scaffold
learning and ensure quality final
submissions. These milestones will be submitted in Modules
Two, Four, and Five. The final project will be submitted in
Module Seven.
In this assignment, you will demonstrate your mastery of the
following course outcomes:
for drawing connections between the events and their economic
impact
fects of government intervention and fiscal
and monetary policy actions for their impact on the economy
economic outcomes and forecasting
their influence on industries and households

44. Prompt
For this assignment, you will first need to choose a 10-year
period in U.S. economic history between 1950 and today. You
will then present the data collected
from government sources related to a variety of macroeconomic
phenomena and analyze them in conjunction with the models
and core principles to explain the
economy-wide changes during your chosen time period. You
will also examine the events of the time in their relation to the
macroeconomic issues as well as the
corresponding government actions taken (fiscal and monetary
policies) to address the issues. The final presentation should be
15–20 slides using PowerPoint,
Prezi, Keynote, or PreZentit, including title and reference
slides. Be sure to include speaker notes to accompany the data
and graphs, information, and
explanations presented on the slide.
Specifically, the following critical elements must be addressed:
I. Examination of Macroeconomic Data (Be sure to include
speaker notes to accompany all of your responses.)
a) Gross Domestic Product (GDP) and Growth
i. Analyze the annual GDP during the time frame to calculate
specific growth rates and trends in the U.S. economy.
ii. Choose two or three of the most relevant historical and/or
current events during this time period that impacted the U.S.
economy. Apply
specific models developed throughout the course to demonstrate

45. how these events influenced national output during this time.
b) Unemployment and Inflation
i. Analyze unemployment and inflation data during the time
frame in their relation to output and growth, using
macroeconomic principles
and models to explain their effect.
ii. Apply specific models developed throughout the course to
demonstrate how the previously selected historical and/or
current events
influenced both unemployment and inflation during this time.
c) Analyze interest rate fluctuations throughout this time period
and their effects on other aspects of the economy. How would
these fluctuations
affect inflation? Would investments and foreign trade rates
increase or decrease? How would the GDP of the American
economy be affected?
d) Foreign Trade
i. Analyze data representing levels of U.S. imports and exports
during this time. How do they relate to other economic
outcomes such as
the GDP, foreign exchange rates, and so on?
ii. Apply specific models developed throughout the course to
demonstrate how domestic and foreign events (e.g., wars,
changes in trade
barriers, development abroad) have impacted the level of and
changes in imports and exports in the United States.
II. Government Policies (Be sure to include speaker notes to
accompany all of your responses.)

46. a) Fiscal Policy
i. Examine the fiscal policies in place at the start of your
specific time period in relation to their effects on
macroeconomic issues. For
instance, consider level of government spending, taxation,
subsidies, unemployment benefits, and so on.
ii. Analyze new fiscal policy actions undertaken by the U.S.
government throughout the time period by describing their
intended effects,
using macroeconomic principles to explain the actions.
iii. Explain the impact of the new fiscal policy actions on
individuals and businesses within the economy by integrating
the macroeconomic
data and principles.
b) Monetary Policy
i. Examine the monetary policies in place at the start of your
specific time period in relation to their effects on
macroeconomic issues. For
instance, consider the discount rate set by the Fed, the rates on
reserves, open market operations, and so on.
ii. Analyze new monetary policy actions undertaken by the U.S.
government throughout the time period by describing their
intended
effects, using macroeconomic principles to explain the actions.
iii. Explain the impact of the new monetary policy actions on
individuals and businesses within the economy by integrating
the
macroeconomic data and principles.

47. III. Conclusion (Be sure to include speaker notes to accompany
all of your responses.)
a) Summarize the overall trends and outcomes of this 10-year
period by integrating the data, economic models, and historical
analysis.
b) Defend your agreement or disagreement with the actions
taken by the U.S. government during this time based upon your
analysis and
application of the macroeconomic theories.
Milestones
Milestone One: Macroeconomic Data Report
In Module Two, you will submit the first three sections of your
final project as outlined in Section I, parts a), b), and c).
1) Choose a 10-year period in the history of the U.S. between
1950 and today. All responses will be related to that timeframe.
b) Gross Domestic Product (GDP) and Growth
i. Analyze the annual GDP to calculate specific growth rates
and trends in the U.S. economy.
ii. Choose two or three of the most relevant events from this
time period that impacted the U.S. economy. Apply specific
models
developed throughout the course to demonstrate how these
events influenced national output during this time period.
c) Unemployment and Inflation
i. Analyze unemployment and inflation data as to their relation
to output and growth, using macroeconomic principles and

48. models to
explain their effect.
ii. Apply specific models developed throughout the course to
demonstrate how the previously selected events influenced both
unemployment and inflation during this time period.
d) Analyze interest rate fluctuations throughout this time period
and their effects on other aspects of the economy. How would
these fluctuations
affect inflation? Would investments and foreign trade rates
increase or decrease? How would the GDP of the American
economy be affected?
2) Present your research with 4–6 slides in PowerPoint, Prezi,
Keynotes, or PreZentit, not including title page and references.
Be sure to include speaker
notes to accompany all of your responses.
3) Apply APA formatting to citations and references.
This milestone will be graded with the Milestone One Rubric.
Milestone Two: Fiscal Policies
In Module Four, you will submit a section of your final project
pertaining to fiscal policies as outlined in Section II, part a).
1) Continue your observation of the 10-year period selected for
Milestone One, and research the government policies
implemented during those years.

49. a) Fiscal Policy
i. Examine the fiscal policies in place at the start of your
specific time period in relation to their effects on
macroeconomic issues. For
instance, consider level of government spending, taxation,
subsidies, unemployment benefits, and so on. Analyze new
fiscal policy actions
undertaken by the U.S. government throughout the time period
by describing their intended effects, using macroeconomic
principles to
explain the actions.
ii. Explain the impact of the new fiscal policy actions on
individuals and businesses within the economy by integrating
the macroeconomic
data and principles.
2) Present your research with 3–5 slides in PowerPoint, Prezi,
Keynotes or PreZentit, not including title page and references.
Be sure to include speaker
notes to accompany all of your responses.
3) Apply APA formatting to citations and references.
This milestone will be graded with the Milestone Two Rubric.
Milestone Three: Monetary Policies
In Module Five, you will submit a section of your final project
pertaining to monetary policies as outlined in Section II, part

50. b).
1) Continue your observation of the 10-year period selected for
Milestone One and research the Government Policies
implemented during those years.
a) Monetary Policy
i. Examine the monetary policies in place at the start of your
specific time period in relation to their effects on
macroeconomic issues. For
instance, consider the discount rate set by the Fed, the rates on
reserves, open market operations, and so on.
ii. Analyze new monetary policy actions undertaken by the U.S.
government throughout the time period by describing their
intended
effects, using macroeconomic principles to explain the actions.
iii. Explain the impact of the new monetary policy actions on
individuals and businesses within the economy by integrating
the
macroeconomic data and principles.
2) Present your research with 3–5 slides in PowerPoint, Prezi,
Keynotes or PreZentit, not including title page and references.
Be sure to include speaker
notes to accompany all of your responses.
3) Apply APA formatting to citations and references.
This milestone will be graded with the Milestone Three Rubric.

51. Final Project: Economic History Analysis Presentation
In Module Seven, you will submit your final project. It will
include new research on foreign trade practices (Section I, part
d), will draw conclusions (Section III),
and integrate all milestones and feedback. It should be a
complete, polished artifact containing all of the critical
elements of the final product.
1) Research and present, in 3–4 slides, foreign trade practices
and policies of the 10-year period you researched for Milestones
One, Two, and Three.
a) Analyze data representing levels of U.S. imports and exports
during this time. How do they relate to other economic
outcomes such as the GDP,
foreign exchange rates, and so on?
b) Apply specific models developed throughout the course to
demonstrate how domestic and foreign events (e.g., wars,
changes in trade barriers,
development abroad) have impacted the level of and changes in
imports and exports in the United States.
2) Draw conclusions to the research carried out throughout the
course.
a) Summarize the overall trends and outcomes of this 10-year
period by integrating the data, economic models, and historical
analysis.
b) Defend your agreement or disagreement with the actions
taken by the U.S. government during this time based upon your
analysis and

52. application of the macroeconomic theories.
3) Incorporate and integrate this information with the slides
developed during Milestones One, Two, and Three into a 15–20-
slide presentation that covers
all the critical elements of the assignment. Be sure to include
speaker notes to accompany all of your responses.
4) Apply APA formatting to citations and references.
The final project will be graded using the Final Project Rubric.
Deliverables
Milestone Deliverables Module Due Grading
1 Macroeconomic Data Report Two Graded separately;
Milestone One Rubric
2 Fiscal Policies Report Four Graded separately; Milestone Two
Rubric
3 Monetary Policies Report Five Graded separately; Milestone
Three Rubric
Final Submission: Economic History
Analysis Presentation
Seven Graded separately; Final Project Rubric

53. Final Project Rubric
Guidelines for Submission: Your economic history analysis
presentation should be 15–20 slides, including title and
reference slides, and include speaker notes to
accompany the slides. Your reference list slide needs to be in
APA format.
Critical Elements Exemplary (100%) Proficient (85%) Needs
Improvement (55%) Not Evident (0%) Value
Examination: GDP:
Growth Rates and
Trends
Meets “Proficient” criteria and
explains relevance of the growth
rates observed
Accurately analyzes the annual
GDP during the time frame to
calculate specific growth rates
and trends in the U.S. economy
and provides information in
speaker notes
Analyzes the annual GDP during
the time frame to calculate

54. specific growth rates and trends
in the U.S. economy, but analysis
is inaccurate, or does not provide
information in speaker notes
Does not analyze the annual GDP
during the time frame
6.4
Examination: GDP:
Influenced National
Output
Meets “Proficient” criteria and
offers a nuanced insight into the
relationship between events and
national output
Applies specific models
developed throughout the course
to demonstrate how relevant
historical and/or current events
have influenced national output
during the time period, and
provides information in speaker
notes
Applies specific models
developed throughout the course
to demonstrate how relevant
historical and current events have
influenced national output during
the time period, but events

55. chosen are not relevant, or does
not provide information in
speaker notes
Does not apply specific models
developed throughout the course
to demonstrate influence on
national output
6.4
Examination:
Unemployment and
Inflation: Output and
Growth
Meets “Proficient” criteria and
explains how data is collected and
calculated
Analyzes unemployment and
inflation data during the time
frame in their relation to output
and growth, using
macroeconomic principles and
models to explain their effect,
and provides information in
speaker notes
Analyzes unemployment and
inflation data during the time
frame, but does not relate
analysis to output and growth,
does not use macroeconomic

56. principles and models to explain
their effect, or does not provide
information in speaker notes
Does not analyze unemployment
and inflation data during the time
frame
6.4
Examination:
Unemployment:
Events
Meets “Proficient” criteria and
offers a nuanced insight into the
relationship between events,
unemployment, and inflation
Applies specific models
developed throughout the course
to demonstrate how relevant
historical/or and current events
have influenced both
unemployment and inflation
during the time period, and
provides information in speaker
notes
Applies specific models
developed throughout the course
to demonstrate how relevant
historical and current events have
influenced both unemployment

57. and inflation during this time
period, but events chosen are not
relevant, or does not provide
information in speaker notes
Does not apply specific models
developed throughout the course
to demonstrate relevant events’
influence on unemployment and
inflation
6.4
Examination: Interest
Rate Fluctuations
Meets “Proficient” criteria and
relates fluctuations to all other
factors of the economy
Analyzes interest rate fluctuations
throughout the time period and
their effect on other aspects of
the economy, such as inflation,
investment, foreign trade, and
the GDP, and provides
information in speaker notes
Analyzes interest rate fluctuations
throughout the time period, but
does not relate this to their effect
on other aspects of the economy

58. such as inflation, investment,
foreign trade, and the GDP, or
does not provide information in
speaker notes
Does not analyze interest rate
fluctuations throughout the time
period
6.4
Examination: Foreign
Trade: Imports and
Exports
Meets “Proficient” criteria and
provides specific detail in
presenting the data
Accurately analyzes data
representing levels of U.S.
imports and exports during the
time period as they relate to
other economic outcomes, and
provides information in speaker
notes
Analyzes data representing levels
of U.S. imports and exports
during the time period, but does
not relate data to other economic
outcomes, does not provide
information in speaker notes, or
analysis is inaccurate

59. Does not analyze data
representing levels of U.S.
imports and exports during the
time period
6.4
Examination: Foreign
Trade: Models
Meets “Proficient” criteria and
offers a nuanced insight into the
relationship between events and
changes in imports and exports
Applies specific models
developed throughout the course
to demonstrate how domestic
and foreign events have impacted
the level of and changes in
imports and exports in the United
States, and provides information
in speaker notes
Applies specific models
developed throughout the course
to demonstrate how domestic
and foreign events have impacted
the level of and changes in
imports and exports in the United
States, but events chosen are not
relevant, or does not provide
information in speaker notes
Does not apply specific models

60. developed throughout the course
to demonstrate impact of
domestic and foreign events on
foreign trade
6.4
Government Policies:
Fiscal: Policies
Meets “Proficient” criteria and
cites scholarly research to
support the relation between the
policies and the issues
Examines the fiscal policies in
place at the start of the specific
time period in relation to their
effects on macroeconomic issues,
and provides information in
speaker notes
Examines the fiscal policies in
place at the start of the specific
time period, but does not relate
this to their effects on
macroeconomic issues, or does
not provide information in
speaker notes
Does not explain the fiscal
policies in place at the start of the
specific time period
6.4

61. Government Policies:
Fiscal: Policy Actions
Meets “Proficient” criteria and is
well qualified and cites scholarly
research with specific examples
and references
Analyzes new fiscal policy actions
undertaken by the U.S.
government throughout the time
period by describing their
intended effects, uses
macroeconomic principles to
explain the actions, and provides
information in speaker notes
Analyzes new fiscal policy actions
undertaken by the U.S.
government throughout the time
period, but does not describe
their intended effects, does not
use macroeconomic principles to
explain the actions, or does not
provide information in speaker
notes
Does not analyze new fiscal policy
actions undertaken by the U.S.
government throughout the time
period
6.4

62. Government Policies:
Fiscal: Impact
Meets “Proficient” criteria and
uses concrete examples to
substantiate claims and to
comprehensively describe the
policy results
Comprehensively explains the
impact of the new fiscal policy
actions on individuals and
businesses within the economy
by integrating the
macroeconomic data and
principles, and provides
information in speaker notes
Explains the impact of the new
fiscal policy actions on individuals
and businesses within the
economy, but is not
comprehensive, does not
integrate the macroeconomic
data and principles, or does not
provide information in speaker
notes
Does not explain the impact of
the new fiscal policy actions on
individuals and businesses within
the economy

63. 6.4
Government Policies:
Monetary: Policies
Meets “Proficient” criteria and
cites scholarly research to
support the relation between the
policies and the issues
Examines the monetary policies
in place at the start of the
selected time period in relation to
their effects on macroeconomic
issues, and provides information
in speaker notes
Examines the monetary policies
in place at the start of the
selected time period, but does
not relate them to their effects on
macroeconomic issues, or does
not provide information in
speaker notes
Does not examine the monetary
policies in place at the start of the
selected time period
6.4
Government Policies:
Monetary: Policy

64. Actions
Meets “Proficient” criteria and is
well qualified and cites scholarly
research with specific examples
and references
Analyzes new monetary policy
actions undertaken by the U.S.
government throughout the time
period by describing their
intended effects, uses
macroeconomic principles to
explain the actions, and provides
information in speaker notes
Analyzes new monetary policy
actions undertaken by the U.S.
government throughout the time
period, but does not describe
their intended effects, does not
use macroeconomic principles to
explain the actions, or does not
provide information in speaker
notes
Does not analyze new monetary
policy actions undertaken by the
U.S. government throughout the
time period
6.4
Government Policies:
Monetary: Impact

65. Meets “Proficient” criteria and
uses concrete examples to
substantiate claims and to
comprehensively describe the
policy results
Comprehensively explains the
impact of the new monetary
policy actions on individuals and
businesses within the economy
by integrating the
macroeconomic data and
principles, and provides
information in speaker notes
Explains the impact of the new
monetary policy actions on
individuals and businesses within
the economy, but is not
comprehensive, does not
integrate the macroeconomic
data and principles, or does not
provide information in speaker
notes
Does not explain the impact of
the new monetary policy actions
on individuals and businesses
within the economy
6.4

66. Conclusion: Trends
and Outcomes
Meets “Proficient” criteria and
highlights specific examples to
demonstrate trends and
outcomes
Summarizes the overall trends
and outcomes of the 10-year
period by effectively integrating
the data, economic models, and
historical analysis, and provides
information in speaker notes
Summarizes the overall trends
and outcomes of the 10-year
period, but does not integrate the
data, economic models, and
historical analysis effectively,
does not apply all three elements,
or does not provide information
in speaker notes
Does not summarize the overall
trends and outcomes of the 10-
year period
6.4
Conclusion:
Agreement or
Disagreement

67. Meets “Proficient” criteria, and
point of view is well supported
and plausible
Defends whether the student
agrees or disagrees with the
actions taken by the U.S.
government during the selected
time period based upon student’s
analysis and application of the
macroeconomic theories, and
provides information in speaker
notes
Defends whether the student
agrees or disagrees with the
actions taken by the U.S.
government during the selected
time period based upon student’s
analysis and application of the
macroeconomic theories, but
defense is weak, does not
accurately analyze and apply
theories, or does not provide
information in speaker notes
Does not defend whether the
student agrees or disagrees with
the actions taken by the U.S.
government during the selected
time period
6.4
Articulation of
Response

68. Submission is free of errors
related to citations, grammar,
spelling, syntax, and organization
and is presented in a professional
and easy-to-read format
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact readability
and articulation of main ideas
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas
4
Earned Total 100%
This one is missing second post I will post it when someone
post something
Resources
Read/review the following resources for this activity:
· Textbook (Foster): Chapter 19
· Textbook (Charters):

69. · Zora Neale Hurston – “The Gilded Six-Bits”
· Lecture 1, 2, 3
Introduction
Every setting in a story carries certain associations that an
author uses to establish a certain atmosphere. Characters in the
story respond to the setting, because the characters have
feelings; and you respond to the setting, too, when you enter
into the world of the story.
Initial Post Instructions
Examine how setting creates a feeling or atmosphere for you the
reader and for the characters in Hurston’s story. How do you
think setting influenced the feelings and actions of the
characters?
Secondary Post Instructions
Different readers are likely to have different feelings about
setting. Select two classmates’ scenarios about setting and
agree or disagree with their depiction. How would changing an
element or two of the setting create a different atmosphere or
feeling for the reader or characters?
Writing Requirements
· In addition to one initial post, respond to at least two peers.
· Initial Post Length: minimum of 250 words
· Secondary Post Length: minimum of 200 words per post
· Using APA format, incorporate appropriate in-text citation(s)
referring to the academic concept with corresponding works
cited page for the initial post.
Grading and Assessment
Meeting the minimum number of postings does not guarantee an
A; you must present an in-depth discussion of high quality,
integrate sources to support your assertions, and refer to peers’
comments in your secondary posts to build on concepts.
Course Learning Outcome(s): 1, 2, 3
1. Gain an appreciation for short stories, their themes, and the
social or political backdrops against which they were written.
2. Improve interpretive and critical thinking skills through

70. reading, discussion, and writing.
3. Evaluate the works' importance to readers on emotional,
artistic, social, and literary levels.
First:
The setting of a story indeed creates certain feelings for the
characters and us that develops a certain atmosphere that may
change throughout the story, which sometimes has an emotional
or shocking effect. I believe the emotional connection we
develop throughout a story is greatly affected when the
atmosphere and characters action change. In Hurston’s story,
‘The Gilded Six-Bits,” the atmosphere changes several times,
causing many different emotions for the characters and myself.
As the story begins, Hurston describes the “perfect” married
couple filled with happiness, joy and love committed to one
another living in an ideal home who seemed to have it all going
for them (Hurston, 1933, pp. 421-422). The atmosphere is
filled with cheerfulness and pleasure, I felt a sense of comfort
as I viewed them as having an amazing and healthy
relationship. There was a sense of contentment and
delightfulness that overcame my heart, especially in a world
today that cheating on a spouse or significant other and divorce
is such a norm.
However, the atmosphere was struck with a devastating storm
and an uneasiness arose throughout the characters. Joe
introduced his wife, Missie May, to Otis D. Slemmons who
opened up an ice cream parlor in their town and was portrayed
as a wealthy man, wearing his up to date clothes and flashing all
his gold to all the women (Hurston, 1933, pp.423). It would be
that one day that all that happiness and love vanished from the
atmosphere as betrayal and disloyalty filled the air. The
disappointment and anger of Joe surfaced when he caught his
wife, who he thought was loyal and committed to their
relationship, cheating on him with Otis Slemmons, and soon
after learned his wife was pregnant but uncertain if the child
would belong to him or Otis (Hurston, 1933, pp. 427). The

71. atmosphere was greatly affected by the character’s actions, Joe
became distant, silent and untrustworthy of his wife. The house
that once was filled with laughter and love was now quiet and
unwarming to my heart. I find it pretty powerful that Hurston
used a female figure to be disgraceful and commit adultery
because it seems that it is usually the male figure that is guilty
of such. Women tend to be more virtuous and caring. I was
caught off guard with Hurston’s choice of the guilty party,
because I typically see the male being treachery. I have seen in
my life far too many relationships crumble because men have
stepped out on their wives. This story is transparent to real-life
besides in the story the female engaged in infidelity, but I
believe Hurston was making a statement, that betrayal and
disloyalty may be provoked by either gender.
The characters altered the setting one last time at the conclusion
of the story when the darkness was filled with light and joy
once again. The silence and distance became of great joy and
happiness when Joe figured out the baby was truly his. The
setting seemed to be of forgiveness. Although Missie May may
have caused Joe a great deal of pain and suffering, making their
marriage weak at one time, Joe was able to surpass the mistake
she made and forgive her. Foster stated, “Geography may
define and even develop characters (Foster, 2017). I believe
this is clearly present in this story. The unthinkable act of
adultery that Missie May committed, may have played an
impactful factor in the growing and developing of Joe’s
forgiveness, and the development of a stronger and healthier
relationship between the couple. They were blessed with a
precious child, which brought great happiness and joy to both.
The relationship once again resembled a “perfect” relationship
between the wife and husband.
Foster, T. C. (2017). How to read literature like a professor: a
lively and entertaining guide to reading between the lines. New