Understanding the Impact of (Fiscal and Monetary) Policy: Using the Send-A-Problem Technique

This page authored by KimMarie McGoldrick, University of Richmond.
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This material is replicated on a number of sites as part of the SERC Pedagogic Service Project
Initial Publication Date: November 13, 2009


Students in an introductory macroeconomics course practice applying their knowledge of monetary and fiscal policy to specific economic scenarios.

During multiple rounds of problem solving facilitated by this send-a-problem, students identify how policy changes can be used in reaction to specific economic conditions or events. They also evaluate such policy changes in terms of resultant impacts on equilibrium conditions.

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Learning Goals

Content Goals:
Identify economic problems associated with various states of the economy.
Choose between fiscal and monetary policy to rectify the economic problems.
Evaluate the policy in terms of positive and potential negative impacts.

Learning Objective: Developing problem solving skills through
Describing current economic conditions using graphical tools.
Distinguishing between alternative policy options.
Applying a policy option to given economic conditions.
Evaluating the effectiveness of the chosen policy option.

Hansen's Proficiency: Displaying command of existing knowledge.

Context for Use

Knowledge required: This exercise is implemented late in a principles of macroeconomics course, after students have been exposed to models of economic adjustment and fiscal and monetary policy.

Class size: This exercise was originally designed for a class of 25-30 students. A minimum class size of 9-12 students is suggested, but the exercise can be adapted for larger classes. (See teaching notes for additional explanation.)

Time required: The exercise takes approximately 50 minutes.

Description and Teaching Materials

The Understanding the Impact of (Fiscal and Monetary) Policy (Microsoft Word 18kB Mar30 12) handout provides the three questions (one for each envelope) used in this send-a-problem exercise. Each exercise includes the problem to be solved as well as detailed instructions for students on the process to be used for each problem.

Teaching Notes and Tips

Dividing the class into groups of 3-4 students determines the number of overall groups. The final number of groups should be divisible by 3 in order to fully allocate the three problems (each which applies one of the key components of the labor force participation model- labor income, nonlabor income, preferences) during three rounds of the exercise. Following these parameters allows the exercise to be scaled up to any class size.

Each problem is affixed to a different envelope, with multiple envelopes for the same problem depending on the class size. For example, for a class size of 90, the instructor prepares 10 envelopes for each of 3 problems to be distributed to 30 groups of 3 students each. Clearly labeling each envelope with an identifier to indicate the different problem it represents (using largely written problem number indicators or different color envelopes) allows for ease of rotating envelopes at each round, ensuring that each group receives a different problem in each round.

This 50-minute exercise is comprised of the following stages: 12-15 minutes for the first problem-solving round, 8-10 minutes for the second problem solving round, 8-10 minutes for the final round critique round, and 15 minutes for reporting out.

The first round of the exercise take a bit more time as students familiarize themselves with the exercise parameters and their roles. The second round also takes less time as they are more familiar with the problem-solving process which is congruent with the first round. Students should not be informed in advance that the final round is a critique of students generated examples as opposed to another round of problem-solving.


Student groups are provided their first problem and instructed that they have 10-12 minutes to formulate an answer to be placed in the envelope at the end of the round. To guide students in developing answers which can be critiqued in the final round, include a statement in the instructions such as "Please organize your answer so that a person outside your group (such as the instructor) may easily follow your logic." After each team has had the opportunity to answer the first set of questions posed to their group and has placed their answers in the attached envelope, the envelopes are rotated around class in a manner that ensures that each group receives a new problem in the second round. In successive rounds of the exercise, student roles should be rotated as well.

Teams answer a second (related but different) question, place their answer in the envelope when time is called and again pass the envelope in a manner which ensures that they receive yet another new problem.

When teams receive their third envelope they are asked (by the instructor) to read the associated questions, remove previous round answers from the attached envelope, and read these aloud to their team. Groups are asked to critique each answer, identifying components which are incomplete or inaccurate.

In order to use time most efficiently during each round, and reinforce positive interdependence, students can be assigned discussion roles which rotate at each round such as facilitator, reflector, and summarizer (described further in the associated handout). It is important to provide an explicit description of each role as a component of the student handout so that they are indeed utilized.

During the thinking and sharing stages of the exercise, it is imperative that the instructor move throughout the classroom to check in on students, monitoring progress, and intervening when necessary. Although instructors may be tempted to directly answer student questions during this period of time, student learning is enhanced to a greater degree if the instructor guides struggling students by posing reflective questions back to them.
Conclusion to the exercise:

Reporting back to the larger group can be facilitated by tossing a soft ball to a random pair and asking them to share part of their answer. Students can be asked to summarize their solution to the problem, being provided an overhead sheet (paper for document camera) to present their graphical component of the solution. Since all students will have seen each example (3 examples, 3 rounds), each student should be able to follow along with the summary presentation. A version of this reporting out process that is both visually oriented and simultaneous among groups utilizes the gallery walk technique.

After the first exercise is presented, students toss the ball to another pair to share a remaining part of the exercise. This process continues until all parts of the answer have been covered.

Alerting students in advance that some pairs will be randomly called upon to explain their answers to the class at the close of the exercise helps to motivate students to work diligently on the task during class and - because the reporting out process occurs in this manner (via a somewhat random draw of students) - students are more engaged in the reporting out process.

Alternatively, the instructor can ask if there are any remaining questions associated with example 1 (then example 2, and then for the final example). If no student responds with a question, the instructor can follow up with a question of their own such as "What is the key to solving this problem and suggesting a specific policy solution?" or "What were the steps that you used in developing your answer?" In this way the instructor keeps the discussion focused while evaluating the comprehension level of the class.

Further considerations:
Instructors may choose to alter the final stage of the send-a-problem in a variety of ways.

Students can be instructed to use the two solutions contained in the final envelope received to compile a final solution to the problem (as opposed to explicitly critiquing each solution).
Students can be instructed to identify the steps that should used to solve the final problem and identify whether the results of each of these steps is revealed in the two solutions contained in the envelope.


Assessment can come at multiple points in this exercise.

Assessment in advance of the exercise: In order to encourage individual accountability, students are asked to complete a similar exercise as their "ticket" to participate. Students are told that their work during the cooperative learning exercise will contribute to their grade and those who do not complete the exercise will be at a serious disadvantage. Grouping those who have not completed the exercise in advance reinforces this component. (Typically these groups are less successful in completing the exercise in the allotted time and learn the value of preparation for the next cooperative learning exercise.)

Assessment during the exercise: Since students are receiving feedback regarding their understanding during each stage in the send-a-problem exercise, they are participating in formative assessment.

Assessment of the exercise: At the end of the exercise, all envelopes are turned in. The instructor has a number of different grading options. Each group response to each exercise can be graded or the final round exercise can be graded. In either case, the grading burden is less than it would be if each student turned in a separate answer.

Assessment post exercise: In order to evaluate the extent to which learning lasts, there are a number of options. Students can be given a follow up problem set which includes exercises to be completed independently. Also, subsequent quizzes and exams can provide formal evaluation of learning opportunities.

References and Resources