1. January 12th Agenda CBM CBM In the News In the News Entrepreneurship Posters & Presentations Entrepreneurship Posters & Presentations Monetary Policy Power Point Monetary Policy Power Point

2. In the News Oil Prices: After watching the price of crude oil collapse by more than 65% to a 12-year low, there are signs that OPEC may have had enough. OPEC may constrain production/supplies to raise the price of crude. U.S. Economy looking good through 2020 – Fundamentals are looking solid: – Fewer Americans are drowning in debt: – Corporate America isn't overly exuberant Dow & S&P 500 Nasdaq Lottery to $1.4 Billion (1:292 Million chance) – Things you could buy… – Avon (AVP): $1.2 billion. La-Z-Boy (LZB): $1.1 billion – U.S. Steel (X): $1 billion. – Pep Boys (PBY): $999 million – Caesars Entertainment (CZR): $972 million. – Red Robin Gourmet Burgers (RRGB): $812 million. – Lands' End (LE): $750 million.. – Crocs (CROX): $672 million. – Barnes & Noble (BKS): $662 million – Men's Wearhouse (MW): $585 million. Tonight: President Obama’s final State of the Union Address

3. Entrepreneurship Products Picture of your product Written description of your product Estimated cost to produce your product (How much startup capital will you need?) At what price will you sell your product? Who is your target audience? A supply and demand graph illustrating your product (Think about your equilibrium price)

4. Entrepreneurship YOU! New Product Ideas by YOU!

5. Fiscal and Monetary Policy Economics Chapter 14

6. Origins of Modern Fiscal and Monetary Policy Fiscal Policy: Government policy regarding taxing and spending Monetary Policy: The FED policy aimed at regulating amount of money in circulation and interest rates Before 1930, government rarely intervened in the economy – good or bad times included

7. Classical Economics - Hayek Founded by Adam Smith – “laissez-faire” Focus on free market Recessions caused by outside influences – wars, crop failures etc… Government should keep taxes low and spending down Friedrich Von Hayek – Austrian School – No government intervention in markets

8. Keynesian Economics Founded by British Economist John Maynard Keynes – father of macroeconomics (1930s) Downward economic spiral Believed that fiscal policy (govt spending) could stimulate overall demand during recessions – cut taxes or boost government spending (deficit spending) FDR used fiscal policy to end Depression

9. Fight of the Century – Keynes vs. Hayek http://www.youtube.com/watch?v=GTQnarz mTOc&safety_mode=true&persist_safety_mo de=1&safe=active http://www.youtube.com/watch?v=GTQnarz mTOc&safety_mode=true&persist_safety_mo de=1&safe=active On your paper, make a T chart. Write down ideas and differences as you watch the video.

10. Chicago School - Friedman American economist Milton Friedman – Chicago School of Economics Believed control of money supply = key to stabilizing economy Use of monetary policy to expand and contract the money supply Depression was caused by drop in money supply “Great contraction” – falling prices, rising unemployment and declining incomes FED should have expanded the money supply

11. Monetarism – Chicago School Rapidly growing money supply = inflation – Demand for goods rises – Firms can’t keep up – Prices rise Slowing growing money supply = deflation – Spending and investment slow as prices drop and inventories grow

12. What role should the government play in helping the economy reach full employment, stable prices and economic growth? Each group will analyze the question from one school of thought – Classical Economics – Hayek/Smith – Keynesian Economics – Keynes – Monetarism – Friedman Your answer should take into account the 3 main economic indicators – GDP, Unemployment and Inflation