Macroeconomics
Writing papers
DISCUSSION 2
Basic Economic Models and Comparative Advantage
The Discussions includes the differences between microeconomics and macroeconomics, the two basic economic models of the circular-flow diagram and the production possibility frontier, and comparative advantage, which is the main force behind interdependence in the market economy and the gains from trade.
Read Chapters 2 and 5, and remember to include references and links to the websites that are important contributors to your posts.
The theory of comparative advantage states that there are gains from trade if countries specialize and optimize their opportunity costs.
a. Why is comparative advantage a driving force behind trade behind trade between regions and countries?
b. Why does specialization lead to welfare improvement? Why engaging in trade is better than trying to be self-sufficient?
DISCUSSION 3
Supply, Demand, and Government Interventions in Markets
This Discussion topic includes the market forces of supply and demand, supply and demand model, and supply and demand curves.
Read Chapters 3 and 4, and remember to include references and links to the websites that you feel are important contributors to your posts (comments).
Supply and demand is the foundation of the market economy and the basis of the study of economics.
a. Why supply and demand is considered as factors that make market economies work? Why supply and demand drives the market economy? Provide an example of the role of supply and demand in business decision making.
b. What is the difference between a movement along and a shift of the demand and supply curves? What are the factors that lead to shifts in supply and demand curves?
DISCUSSION 4
National Income Determination (GDP)
This Discussion focuses on how a nation’s income is measured using the gross domestic product (GDP)/ The specific areas of discussion include the various components of the GDP, the difference between nominal and real GDP, GDP and business cycles, and the limitations of the GDP in measuring economic welfare.
Read chapters 6 and 7, and remember to include references and links to the websites that you feel are important contributors to your posts (comments).
Economists use Gross Domestic Product (GDP) to measure the economic activity and the national income.
1. What are the major components of the USA GDP? Explain the contribution of each component to the GDP with data.
2. What is the difference between real Gross Domestic Product (GDP) and nominal GDP? What is the relationship between the real GDP and the business cycle?
DISCUSSION 5
Effects of Unemployment and Inflation
This Discussion focuses on how to measure the cost of living and rate of unemployment in the economy. Specific discussion areas include the various forms of unemployment and how they are measured, debates on measuring unemployment rate, and the imperfections of official unemployment rate. Moreover, consumer price index (CPI), rate of inflation, and their impacts on the cost of living.
Read Chapter 8, and remember to include references and links to the websites that are important contributors to your posts (comments).
There are various forms of unemployment. There are also ongoing debates on the effectiveness of measuring the rate of unemployment and its policy implications.
a. What are the different types of unemployment and how are they related to the condition of the economy during a given period? Is it possible for the number of employed workers to increase while the unemployment rate rises? Explain
b. Does an increase in the minimum wage rate result in a higher unemployment rate? What is your opinion on the relationship between unemployment benefits and labor market participation of the unemployed people?
DISCUSSION 6
Long Term Economic Growth
This Discussion focuses on the long term economic growth. The specific discussion areas include measuring economic growth and natural resources.
Read Chapters 9 and 10, and remember to include references and links to the websites that are important contributors to your posts (comments).
The long-run growth is measured as the increase in real GDP per capita and this measure has changed over time and it also varies across countries. A country’s standard of living depends on its ability to produce goods and services (productivity).
a. How do we measure long-term economic growth of a country? What are the key determinants of long-run economic growth?
b. What is the relationship between economic growth and productivity? What is the major source of growth in labor productivity?
DISCUSSION 7
How Money Affects the Economy
This Discussion deals with the various forms and uses of money, the roles of the Federal Reserve System, money supply, money demand, and monetary policy instruments.
Read Chapters 14 and 16, and remember to include references and links to the websites that you feel are important contributors to your posts (comments).
The Federal Reserve may increase or decrease money supply depending on the economic condition.
a. What policy instruments does the Fed use for the monetary policy?
b. What are the pros and cons of using expansionary and contractionary monetary policy tools under the following scenarios: depression, recession, inflation, and robust economic growth? Which do you think is more appropriate today?
DISCUSSION 8
Aggregate Demand and Aggregate Supply
This Discussion deals with aggregate demand and aggregate supply, and the introduction to basic concepts in open-economy macroeconomics. The specific areas of discussion are the AS-AD model, AS and AD curves, shocks in AS and AD demand, and key concepts in open-economy macroeconomics.
Read chapters 11 and 12, and remember to include references and links to the websites that you feel are important contributors to your posts (comments).
Aggregate supply (AS) and aggregate demand (AD) models, and AS/AD curves are essential to understanding macroeconomic fluctuations (business cycles).
a. Discuss the importance AS-AD models are in explaining the macroeconomic conditions of the economy and business cycles like recessions.
b. What factors shift AS and AD curves? How do you explain macroeconomic fluctuations using AS-AD models and AS/AD curves?
DISCUSSION 9
Monetary and Fiscal Policy Applications
This Discussion focuses on the effects of monetary and fiscal policy instruments on the aggregate demand in the economy. The specific areas of discussion include how monetary and fiscal policy instruments are used to change AD, the differences between monetary and fiscal policy, and their respective instruments.
Read chapters 13 and 15, and remember to include references and links to the websites that are important contributors to your posts (comments).
Monetary and fiscal policy instruments are used to affect the aggregate demand (AD) in the economy.
a. What is the difference between contractionary and expansionary monetary policy? What is the difference between contractionary and expansionary fiscal policy? How does each policy affect the AD in the economy?
b. What are the benefits and major problems of the fiscal policy and monetary policy?
DISCUSSION 10
Debates in Macroeconomics
This Discussion deals with the debates over macroeconomic policy, which include stabilization policy, monetary policy on rules versus discretion, zero inflation target, public debt, and reforming tax laws.
Read chapters 17 and 18, and remember to include references and links to the websites that are important contributors to your posts (comments).
There are pros and cons of using monetary and fiscal policy tools to stabilize the economy.
1. Explain the main arguments in favor of economic stabilization during recessions. Explain why policy lags could make stabilization policies counterproductive.
2. What are the justifications given in favor of more government involvement in the market economy? What are the reasons given in favor of less government involvement in the market economy?
[204] Unit 2 Assignment Template
According to the author, economists approach economic problems with economic models, and these models will help familiarize you with how economists approach economic problems. The models also help explain how individuals and countries gain from trade. Accordingly, trade allows people to specialize in the production of goods and services for which they have comparative advantages and, then trade for goods and services that other people produce based on their comparative advantages.
The Assignment questions deal with the application of the economic models and the roles of comparative advantage in the gains from trade.
1. Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade between individuals or countries? Is it absolute advantage or comparative advantage? Why?
2. Assume two students must prepare a presentation for their marketing class. As part of their class presentation, they must do a series of calculations and prepare 50 PowerPoint slides. It would take Larry 10 hours to do the required calculation and 10 hours to prepare the slides. It would take Kate 12 hours to do the series of the calculations and 20 hours to prepare the PPT slides.
A. How much time would it take the two students to complete the project if they divide the two tasks equally?
B. How much time would it take the two students to complete the project if they use comparative advantage and specialize in calculating or preparing slides?
C. If Larry and Kate have the same opportunity cost of $5 per hour, is there a better solution than for each to specialize in calculating or preparing slides?
3. Assume there are only two countries in the world, and the two countries face the following production possibilities frontiers. Further assume that the two countries produce popcorn and peanuts.
(see below for questions)
Country A’s Production Possibilities Frontier
Country B’s Production Possibilities Frontier
A. Assume that country A and country B decide to use half of the resources in the production of each good. Indicate the points of the maximum output of each good on the graphs for each country as point A under such resource use.
B. Assume the two countries choose autarky and do not trade. What would be the total world production of popcorn and peanuts under the autarky?
C. Assume that each country decides to specialize in either popcorn or peanut based on its respective comparative advantage. Under the specialization, what is the total production of popcorn and peanuts?
D. Assume country A and B decide to trade 100 units of popcorn for 100 units of peanuts, show on the graphs the gain each country receives from trade. Label these points on the two graphs “B.”
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[204] Unit 3 Assignment Template
As a marketing specialist working for a production company, it is your job to explain to investors how the current status of the supply will meet the changing demand for products. Based on the following Assignment questions compile answers that effectively addresses the hypothetical examples provided in the Assignment.
This Assignment deals with the Production Possibility Frontier and market forces of supply and demand models as well as the impacts of government policies on the interactions of supply and demand in the market economy.
1) Given the table below, graph the demand and supply curves for flashlights. Make certain to label the equilibrium price and equilibrium quantity.
Price
Quantity Demanded Per Month
Quantity Supplied Per Month
$5
6,000
10,000
$4
8,000
8,000
$3
10,000
6,000
$2
12,000
4,000
$1
14,000
2,000
a. What are the equilibrium price and the equilibrium quantity?
b. Suppose the price is currently $5. Explain what problem would exist in the market and calculate the size of that problem. What would you expect to happen to price?
c. Suppose the price is currently $2. Explain what problem would exist in the market and calculate the size of the problem. What would you expect to happen to price?
2) Consider supply and demand for Maine lobsters indicated in the following tables to answer questions from a–e below. Suppose that the supply schedule of Maine lobsters is as follows:
Price of Lobster per Pound
Maine Quantity of Lobster Supplied (pounds)
$25
800
$20
700
$15
600
$10
500
$5
400
First, assume that Maine lobsters can be sold only in the United States. The U.S. demand schedule for Maine lobsters is as follows:
Price of Lobster per Pound
USA Quantity of Lobster Demanded (pounds)
$25
200
$20
400
$15
600
$10
800
$5
1,000
a. Looking at both the schedules of supply and demand, as well as the graph of the demand and supply curve for Maine Lobsters, what is the equilibrium price of lobsters and the equilibrium quantity of lobsters demanded and supplied at that price?
b. Second, suppose that Maine lobsters can also be sold in France. The French demand schedule for Maine lobsters is as follows:
Price of Lobster per Pound
Quantity of Lobster Demanded (pounds)
$25
100
$20
300
$15
500
$10
700
$5
900
c. What is the demand schedule for Maine lobsters now that French consumers can also buy them?
d. Using the combined U.S. and French demand schedule, the U.S. demand schedule and the supply schedule, and the graph below, analyze the change in the market for lobsters. What will happen to the price at which fishermen can sell lobster? What will be the final output of lobsters?
e. What will happen to the price paid by U.S. consumers? What will happen to the quantity consumed by U.S. consumers?
3) Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fresh fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced. Obviously, given their limited resources and available technology, as they use more of their resources for potato production, there are fewer resources available for catching fish.
Year
Quantity of Potatoes (Pounds)
Quantity of Fish (Pounds)
A
1,000
0
B
800
300
C
600
500
D
400
600
E
200
650
F
0
675
Examine the Maximum annual output options table above and the resulting Production Possibility Frontier Graph below and answer questions from a-e.
a. Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain.
b. What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 pounds?
c. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 pounds?
d. Can you explain why the answers to parts b and c are not the same?
e. What does this imply about the slope of the production possibility frontier?
4) Now that you have segmented the components of the changes in supply and demand and the ability to meet demand, explain how the current status of the supply will meet the changing demand for the products, and the change in the production possibilities will be able to meet the market demand.
[204] Unit 5 Assignment Template
In this Assignment, you will deal with how to measure the cost of living and rate of unemployment in the economy.
Economists measure prices in the macroeconomy to generate a consumer price index (CPI) and, then employ the CPI to compare dollar figures from different points in time and to adjust interest rates for inflation. This helps measure the change in the cost of living. The labor market is also introduced, and enables us to see how full utilization of labor resources improves the level of production and the standard of living. Economists measure the performance of the labor market using unemployment statistics.
1) Assume there is a simple economy where people consume only two goods, food and clothing. Further assume that the market basket of goods used to compute the CPI consists of 100 units of food and 20 units of clothing.
Yearly Price per Unit
Food
Clothing
2004 price per unit
$8
$20
2005 price per unit
$12
$40
a. Compute the percentage changes in the price of food and the percentage change in the price of clothing between 2004 and 2005.
b. Calculate the percentage change in the CPI between 2004 and 2005.
c. Do you think the CPI price changes affect all consumers in the economy to the same extent? If not, how do you determine who “wins” and who “loses” in this particular situation? Explain.
2) Calculate how much each of the following items is worth in terms of today’s dollars using 180 as the price index for today.
a. In 1925, the CPI was 18 and the price of a movie ticket was $0.30.
b. In 1930, the CPI was 14 and a cook earned $20 a week.
c. In 1940, the CPI was 16 and a gallon of gas cost $0.20.
3) The table below uses data for three hypothetical countries. All the number values are in thousands.
a. Complete the following table:
Country
Adult Population
Employed
Unemployed
Unemployment Rate
Labor-Force Participation Rate
A
120,000
60,000
4,500
B
28,000
3,000
60
C
70,000
40,000
10
High rate of unemployment in an economy negatively affects individuals, their families, and a nation as a whole since labor force is a very important productive resource. Based on this background information and the table you completed under “3a”, answer the following questions.
b. How does the government officially measure employment and unemployment in the economy? Why is it usually stated that the official unemployment rate likely underestimates the actual level of unemployment in the economy?
c. Based on the table under “3a”, describe the relationship between employment and economic well-being in the economy for each country. What are the impacts of labor force utilization and high unemployment rate on the national economy of country A, B, and C?
4) The following table indicates U.S. real GDP data to answer the following questions.
Year
Real GDP (2000 prices) (in millions)
Population (in millions)
1987
$6,435,000
243
2005
$11,092,000
296.6
a. What is the Real GDP per person in 1987?
b. What is the Real GDP per person in 2005?
c. What is the percent change in Real GDP per person between 1987 and 2005?
5) Now that you have segmented the components of macroeconomic aggregates, explain their implications on the national economy. Provide examples based on your answers above and explain how CPI affects consumers, how CPI affects price, the effects of employment and unemployment on the U.S. economy, and how the changes in living standards could affect employees and the national economy.
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[204] Unit 7 Assignment Template
This Assignment deals with money, the Federal Reserve System, and the effects of money growth on the rate of inflation. In this Assignment, assume you are hired as an assistant quantitative analyst at a bank and one of your duties is calculating reserves and loans based on the total deposits in the bank.
Given the scenarios provided below, complete the tables and explain the computation results. This Assignment requires a combination of short paragraph answers, computations, and completion of a 450-500 word essay.
1) This section deals with increase in money supply given two scenarios (see “a” and “b” below). In Westlandia, the public holds 50% of money one (M1) in the form of currency, and the required reserve ratio is 20%.
a) Estimate how much the money supply will increase in response to a new cash deposit of $500 by completing the accompanying table and calculate the new total money supply.
(Hint: The first row shows that the bank must hold $100 in minimum reserves — 20% of the $500 deposit — against this deposit, leaving $400 in excess reserves that can be loaned out. However, since the public wants to hold 50% of the loan in currency, only $400 × 0.5 = $200 of the loan will be deposited in round 2 from the loan granted in Round 1.)
Round
Deposits
Required reserves
Excess reserves
Loans
Loan proceeds held as currency
Loan proceeds deposited
1
$500.00
$100.00
$400.00
$400.00
$200.00
$200.00
2
$200.00
3
4
5
6
7
8
9
10
Totals
b) Estimate how much the money supply will increase in response to a new cash deposit of $500 by completing the accompanying table and calculate the new total money supply. How does your answer compare to an economy in which the total amount of the loan is deposited in the banking system and the public does not hold any of the loans in currency? (Hint: Complete the table below when none of the loan proceeds are held in currency following the example for row 1.)
Round
Deposits
Required reserves
Excess reserves
Loans
Loan proceeds held as currency
Loan proceeds deposited
1
$500.00
$100.00
$400.00
$400.00
0.00
$400.00
2
$400.00
3
4
5
6
7
8
9
10
Totals
c) Calculate the Money Multiplier for question 1. a.) based on its computed change in money supply, and calculate the Money Multiplier for question 1. b.) based on its computed change in money supply. What does this imply about the relationship between the public’s desire for holding currency and the money multiplier? Which scenario will contribute more to increase in money supply?
2) Explain how each of the following situations changes quantity of money (money supply) in the economy, based on its computed change in money supply.
a) The Federal Reserve System buys bonds
b) The Federal Reserve System auctions credit
c) The Federal Reserve System raises the discount rate
d) The Federal Reserve System raises the reserve requirement
3) Assume that in a country the total holdings of banks were as follows:
Bank
Amount in million dollars
Required Reserve
$45
Excess Reserve
$15
Deposits
$750
Loans
$600
Treasury Bonds
$90
a) Show that the balance sheet balances if these are the only assets and liabilities.
b) Assuming that people hold no currency, what happens to each of these values if the central bank changes the reserve requirement ratio to 2%, banks still want to hold the same percentage of excess reserves, and banks do not change their holdings of Treasury bonds?
c) How much does the money supply change by?
4) Complete the following in 450-500 word essay. As an assistant quantitative analyst for this bank, what can you assume from these results? What recommendations can you provide to your senior manager on loan rates, depending on the Federal Reserve System’s ratio percentage? What should the bank do when the Fed raises the discount rate and the Federal Funds Rate? What should the bank do when the Fed increases and decreases the reserve ratio to change the reserve requirement?
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[204] Unit 4 Assignment Template
This Assignment deals with how a nation’s income is measured using Gross Domestic Product (GDP). In doing so, it highlights the various components of the GDP, the difference between nominal and real GDP, and the limitations of the GDP as a measure of national income.
1) U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and what does it not tell us, about the well-being of U.S. residents? What are the limitations of the GDP as a measure of economic well-being? Given the limitations, why is GDP usually regarded as the best single measure of a society’s economic well-being?
2) What is an intermediate good? How does an intermediate good differ from a final good? Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.
3) GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included.
4) The table below contains data for country A for the year 2010.
Country A’s Goods and Services
Total
Household purchases of durable goods
$1293
Household purchases of nondurable goods
$1717
Household purchases of services
$301
Household purchases of new housing
$704
Purchases of capital equipment
$310
Inventory changes
$374
Purchases of new structures
$611
Depreciation
$117
Salaries of government workers
$1422
Government expenditures on public works
$553
Transfer payments
$777
Foreign purchases of domestically produced goods
$88
Domestic purchases of foreign goods
$120
Refer to the Table above to answer the following questions.
a. What was country A’s GDP in 2010?
b. What was country A’s consumption in 2010?
c. What was country A’s investment in 2010?
d. What were country A’s government purchases in 2010?
e. What were country A’s exports and imports in 2010? What was the net export in 2010?
Page 1 of 2
[204] Unit 8 Assignment Template
This Assignment deals with areas discussed under Aggregate Supply (AS) and Aggregate Demand (AD), and the basic concepts of open-economy macroeconomics.
1) Long-run Macroeconomic Equilibrium and Stock Market Boom
Assume the economy reaches its long-run macroeconomic equilibrium in 2020. When the economy is in the long-run macroeconomic equilibrium, the stock market will also reach its boom. This will in turn lead to increases in stock prices more than expected, and the stock prices will stay high for some period.
Answer the following questions based on the scenarios of long macroeconomic equilibrium and consequent stock market boom.
a) Which curve will shift? Is it AS curve or AD curve? In which direction does the shift occur?
b) In the short-run, what will happen to the price level and output (real GDP)?
c) What will happen to the expected price level? What impact does this have on wage bargaining power of workers?
d) In the long-run, which curve will shift due to the change in price expectations created by the stock market boom? In which direct will it shift?
e) How does the new long-run macroeconomic equilibrium differ from the original equilibrium?
2) Studies indicate that net exports and net capital outflows tend to be equal.
a) Why do net exports and net capital outflows tend to be equal?
b) How does a change in interest rates lead to changes in net exports?
3) Assume there is a decrease in the demand for goods and services, which leads to a decrease in the real GDP and eventually the economy into recession.
a) When the economy enters recession due to a decline in demand, what will happen to the price level?
b) Assume there is no government intervention. What will ensure that the economy still eventually gets back to the natural rate of output (real GDP)?
4) A number macroeconomic variables decline during recessions. One of these variables is the GDP.
a) What other variables, besides real GDP, tend to decline during recessions? Given the definition of real GDP and its components, explain the declines in these economic variables which are to be expected.
b) Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How is this possible given business cycles and macroeconomic fluctuations? What factors explain the upward trend in spite of the cycles?
5) Assume there are short-run and long-run Macroeconomic Equilibriums in the economy.
Refer to the AS and AD curves above to answer the following questions.
a) What is the initial point of the long-run macroeconomic equilibrium? What are the equilibrium values? What does the appearance of the long-run aggregate-supply (LRAS) curve indicate? How does it differ from AS?
b) What are the factors that can shift short-run aggregate supply curve from AS1 to AS2? What does Point A represent in the graph? What does point B represent? Is it the short-run or long-run macroeconomic equilibrium? Explain.
c) Assume aggregate demand (AD) is held constant, in the long-run, starting from point B, what will the economy likely experience? Will it reach the long equilibrium?
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Unit4 [204]
Page 1 of 3
Unit 4 Assignment: National Income
Determination
1. Your Assignment should have a cover sheet with the following information:
Your Name
Course Number
Section Number
Date
2. You may submit your Assignment using the Unit 4 Assignment template.
3. Your answers should follow APA formatting by being in double-spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your answers
should also be in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your answers should be highly
organized, logical, and focused.
Assignment
This Assignment deals with how a nation’s income is measured using Gross Domestic Product
(GDP). In doing so, it highlights the various components of the GDP, the difference between nominal
and real GDP, and the limitations of the GDP as a measure of national income.
1) U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell us, and
what does it not tell us, about the well-being of U.S. residents? What are the limitations of the GDP as
a measure of economic well-being? Given the limitations, why is GDP usually regarded as the best
single measure of a society’s economic well-being?
2) What is an intermediate good? How does an intermediate good differ from a final good? Explain
why it is the case that the value of intermediate goods produced and sold during the year is not
included directly as part of GDP, but the value of intermediate goods produced and not sold is
included directly as part of GDP.
3) GDP is defined as the market value of all final goods and services produced within a country in a
given period of time. In spite of this definition, some production is left out of GDP. Explain why some
final goods and services are not included.
https://kapextmediassl-a.akamaihd.net/business/204/1902C/Assignment_Templates/Unit4_Template x
Unit 4 [204]
Page 2 of 3
4) The table below contains data for country A for the year 2010.
Country A’s Goods and Services Total
Household purchases of durable goods $1293
Household purchases of nondurable goods $1717
Household purchases of services $301
Household purchases of new housing $704
Purchases of capital equipment $310
Inventory changes $374
Purchases of new structures $611
Depreciation $117
Salaries of government workers $1422
Government expenditures on public works $553
Transfer payments $777
Foreign purchases of domestically produced
goods
$88
Domestic purchases of foreign goods $120
Refer to the Table above to answer the following questions.
a. What was country A’s GDP in 2010?
b. What was country A’s consumption in 2010?
c. What was country A’s investment in 2010?
d. What were country A’s government purchases in 2010?
e. What were country A’s exports and imports in 2010? What was the net export in 2010?
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and
with a name that you will remember. Make sure your Assignment is in the appropriate template
provided. Then, when you are ready, you may submit to the Dropbox.
Unit 4 [204]
Page 3 of 3
Unit 4 Assignment: National Income Determination Points
Possible
Points
Earned
Content and Analysis
Problem #1
Explained the changes in real GDP and its limitations.
7
Problem #2
Correctly explained intermediate goods in GDP.
7
Problem #3
Correctly identified the limitations of the GDP.
6
Problem #4
Compute GDP in 2010. (“a”)
5
Correctly calculate consumption. (“b”) 5
Correctly calculate investment. (“c”) 5
Computed government purchase. (“d”) 5
Identify export and import and calculate net export. (“e”) 5
Writing style, grammar, and APA formatting. 5
Total 50
Unit3 [BU204]
Page 1 of 6
Unit 3 Assignment: Supply and Demand Model
and PPF
1. Your Assignment should have a cover sheet with the following information:
● Your Name
● Course Number
● Section Number
● Date
2. You may submit your Assignment using the Unit 3 Assignment template.
3. Your answers should follow APA formatting by being in double-spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your answers
should also be in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your answers should be highly
organized, logical, and focused.
Assignment
As a marketing specialist working for a production company, it is your job to explain to investors how
the current status of the supply will meet the changing demand for products. Based on the following
Assignment questions compile answers that effectively addresses the hypothetical examples
provided in the Assignment.
This Assignment will assess your knowledge based on the following outcome:
BU204-1: Describe the importance of Production Possibility Frontier, the Circular Flow Diagram, and
the Supply and Demand models in the market economy.
This Assignment deals with the Production Possibility Frontier and market forces of supply and
demand models as well as the impacts of government policies on the interactions of supply and
demand in the market economy.
https://kapextmediassl-a.akamaihd.net/business/204/1902C/Assignment_Templates/Unit3_Template x
Unit 3 [AB204]
Page 2 of 6
1) Given the table below, graph the demand and supply curves for flashlights. Make certain to label
the equilibrium price and equilibrium quantity.
Price Quantity Demanded Per
Month
Quantity Supplied Per
Month
$5 6,000 10,000
$4 8,000 8,000
$3 10,000 6,000
$2 12,000 4,000
$1 14,000 2,000
a. What are the equilibrium price and the equilibrium quantity?
b. Suppose the price is currently $5. Explain what problem would exist in the market
and calculate the size of that problem. What would you expect to happen to price?
c. Suppose the price is currently $2. Explain what problem would exist in the market
and calculate the size of the problem. What would you expect to happen to price?
2) Consider supply and demand for Maine lobsters indicated in the following tables to answer
questions from a–e below. Suppose that the supply schedule of Maine lobsters is as follows:
Price of Lobster per
Pound
Maine Quantity of Lobster
Supplied
(pounds)
$25 800
$20 700
$15 600
$10 500
$5 400
First, assume that Maine lobsters can be sold only in the United States. The U.S. demand schedule
for Maine lobsters is as follows:
Price of Lobster per
Pound
USA
Quantity of Lobster Demanded
(pounds)
$25 200
$20 400
Unit 3 [AB204]
Page 3 of 6
Price of Lobster per
Pound
USA Quantity of Lobster Demanded
(pounds)
$15 600
$10 800
$5 1,000
a. Looking at both the schedules of supply and demand, as well as the graph of the
demand and supply curve for Maine Lobsters, what is the equilibrium price of lobsters
and the equilibrium quantity of lobsters demanded and supplied at that price?
b. Second, suppose that Maine lobsters can also be sold in France. The French demand
schedule for Maine lobsters is as follows:
Price of Lobster per
Pound
Quantity of Lobster Demanded
(pounds)
$25 100
$20 300
$15 500
$10 700
$5 900
c. What is the demand schedule for Maine lobsters now that French consumers can
also buy them?
d. Using the combined U.S. and French demand schedule, the U.S. demand schedule
and the supply schedule, and the graph below, analyze the change in the market for
lobsters. What will happen to the price at which fishermen can sell lobster? What will be
the final output of lobsters?
e. What will happen to the price paid by U.S. consumers? What will happen to the
quantity consumed by U.S. consumers?
3) Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch
fresh fish. The accompanying table shows the maximum annual output combinations of potatoes and
fish that can be produced. Obviously, given their limited resources and available technology, as they
use more of their resources for potato production, there are fewer resources available for catching
fish.
Unit 3 [AB204]
Page 4 of 6
Year Quantity of Potatoes
(Pounds)
Quantity of Fish (Pounds)
A 1,000 0
B 800 300
C 600 500
D 400 600
E 200 650
F 0 675
Examine the Maximum annual output options table above and the resulting Production Possibility
Frontier Graph below and answer questions from a-e.
a. Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain.
b. What is the opportunity cost of increasing the annual output of potatoes from 600 to 800
pounds?
c. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400
pounds?
Unit 3 [AB204]
Page 5 of 6
d. Can you explain why the answers to parts b and c are not the same?
e. What does this imply about the slope of the production possibility frontier?
4) Now that you have segmented the components of the changes in supply and demand and the
ability to meet demand, explain how the current status of the supply will meet the changing demand
for the products, and the change in the production possibilities will be able to meet the market
demand.
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and
with a name that you will remember. Make sure your Assignment is in the appropriate template
provided. Then, when you are ready, you may submit to the Dropbox.
Unit 3 Assignment: Supply and Demand Model and PPF Points
Possible
Points
Earned
Content and Analysis
Problem #1
Correctly explained the equilibrium values.
5
Correctly explained the excess demand. 5
Correctly explained excess supply. 5
Problem #2
Correctly identified equilibrium price and quantity. 5
Provided a demand schedule for the combined demand of U.S. and
French consumers.
5
Identified the new market price and quantity supplied. 5
Identified the new price U.S. consumers pay and the new quantity
demanded.
5
Problem #3
Identified the infeasible production. (“a”) 5
Correctly calculate the opportunity cost. (“b”) 5
Correctly calculate the opportunity cost. (“c”) 5
Explained the differences in opportunity costs. (“d”) 5
Explained the slope of PPF. (“e”) 5
Unit 3 [AB204]
Page 6 of 6
Unit 3 Assignment: Supply and Demand Model and PPF Points
Possible
Points
Earned
Problem #4
Explained how changes in the production possibilities (supply) meet the
change in the market demand.
10
Writing style, grammar, and APA formatting. 5
Total
75
Unit8 [204]
Page 1 of 4
Unit 8 Assignment: Aggregate Supply and
Aggregate Demand (AS-AD) Model
1. Your Assignment should have a cover sheet with the following information:
● Your Name
● Course Number
● Section Number
● Date
2. You may submit your Assignment using the Unit 8 Assignment template.
3. Your answers should follow APA formatting by being in double-spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your answers
should also be in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your answers should be highly
organized, logical, and focused.
Assignment
This Assignment deals with areas discussed under Aggregate Supply (AS) and Aggregate Demand
(AD), and the basic concepts of open-economy macroeconomics.
1) Long-run Macroeconomic Equilibrium and Stock Market Boom
Assume the economy reaches its long-run macroeconomic equilibrium in 2020. When the economy is
in the long-run macroeconomic equilibrium, the stock market will also reach its boom. This will in turn
lead to increases in stock prices more than expected, and the stock prices will stay high for some
period.
Answer the following questions based on the scenarios of long macroeconomic equilibrium and
consequent stock market boom.
a) Which curve will shift? Is it AS curve or AD curve? In which direction does the shift occur?
b) In the short-run, what will happen to the price level and output (real GDP)?
c) What will happen to the expected price level? What impact does this have on wage
bargaining power of workers?
d) In the long-run, which curve will shift due to the change in price expectations created by the
stock market boom? In which direct will it shift?
e) How does the new long-run macroeconomic equilibrium differ from the original equilibrium?
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Unit 8 [204]
Page 2 of 4
2) Studies indicate that net exports and net capital outflows tend to be equal.
a) Why do net exports and net capital outflows tend to be equal?
b) How does a change in interest rates lead to changes in net exports?
3) Assume there is a decrease in the demand for goods and services, which leads to a decrease in
the real GDP and eventually the economy into recession.
a) When the economy enters recession due to a decline in demand, what will happen to the
price level?
b) Assume there is no government intervention. What will ensure that the economy still
eventually gets back to the natural rate of output (real GDP)?
4) A number macroeconomic variables decline during recessions. One of these variables is the GDP.
a) What other variables, besides real GDP, tend to decline during recessions? Given the
definition of real GDP and its components, explain the declines in these economic variables
which are to be expected.
b) Empirical studies indicate that the long-run trend in real GDP of the USA has an upward
trend. How is this possible given business cycles and macroeconomic fluctuations? What
factors explain the upward trend in spite of the cycles?
5) Assume there are short-run and long-run Macroeconomic Equilibriums in the economy.
Refer to the AS and AD curves above to answer the following questions.
a) What is the initial point of the long-run macroeconomic equilibrium? What are the equilibrium
values? What does the appearance of the long-run aggregate-supply (LRAS) curve indicate?
How does it differ from AS?
Unit 8 [204]
Page 3 of 4
b) What are the factors that can shift short-run aggregate supply curve from AS1 to AS2? What
does Point A represent in the graph? What does point B represent? Is it the short-run or long-
run macroeconomic equilibrium? Explain.
c) Assume aggregate demand (AD) is held constant, in the long-run, starting from point B, what
will the economy likely experience? Will it reach the long equilibrium?
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and
with a name that you will remember. Make sure your Assignment is in the appropriate template
provided. Then, when you are ready, you may submit to the Dropbox.
Unit 8 Assignment: Aggregate Supply and Aggregate Demand (AS-
AD) Model
Points
Possible
Points
Earned
Content and Analysis
Problem #1
Identified the curve that shifts. (“a”)
3
Explained the effects on price and real GDP. (“b”) 3
Explained the effects on the short-run expected price and wage
bargaining. (“c”)
3
Explained long-run impacts on price expectations. (“d”) 3
Identified new long-run equilibrium. (“e”) 3
Problem #2
Provided explanations for the relationships between net export and net
capital flows.
3
Explained the impacts of interest rates on net exports. 3
Problem #3
Identified the impacts of recessions on price.
3
Described how the economy returns to natural rate of output. 3
Problem #4
Explained the variables that decline during recessions.
3
Explained upward trend of real GDP under business cycles. 3
Problem #5
Correctly identified long-run macroeconomic equilibrium and its values.
(“a”)
3
Explained the factors that shift AS. (“a”) 3
Unit 8 [204]
Page 4 of 4
Unit 8 Assignment: Aggregate Supply and Aggregate Demand (AS-
AD) Model
Points
Possible
Points
Earned
Identified short-run equilibrium at (“b”). 3
Explained long-run change in short-run equilibrium. (“c”) 3
Writing style, grammar, and APA formatting. 5
Total 50
Unit2 [204]
Page 1 of 3
Unit 2 Assignment: Economic Models and
Comparative Advantage
1. Your Assignment should have a cover sheet with the following information:
● Your Name
● Course Number
● Section Number
● Date
2. You may submit your Assignment using the Unit 2 Assignment template.
3. Your answers should follow APA formatting by being in double-spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your answers
should also be in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your answers should be highly
organized, logical, and focused.
Questions:
According to the author, economists approach economic problems with economic models, and
these models will help familiarize you with how economists approach economic problems. The
models also help explain how individuals and countries gain from trade. Accordingly, trade allows
people to specialize in the production of goods and services for which they have comparative
advantages and, then trade for goods and services that other people produce based on their
comparative advantages.
The Assignment questions deal with the application of the economic models and the roles of
comparative advantage in the gains from trade.
1. Explain the difference between absolute advantage and comparative advantage. W hich is more
important in determining trade between individuals or countries? Is it absolute advantage or
comparative advantage? W hy?
2. Assume two students must prepare a presentation for their marketing class. As part of their class
presentation, they must do a series of calculations and prepare 50 PowerPoint slides. It would
take Larry 10 hours to do the required calculation and 10 hours to prepare the slides. It would take
Kate 12 hours to do the series of the calculations and 20 hours to prepare the PPT slides.
A. How much time would it take the two students to complete the project if they divide the two
tasks equally?
B. How much time would it take the two students to complete the project if they use
comparative advantage and specialize in calculating or preparing slides?
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Unit 2 [204]
Page 2 of 3
C. If Larry and Kate have the same opportunity cost of $5 per hour, is there a better solution
than for each to specialize in calculating or preparing slides?
3. Assume there are only two countries in the world, and the two countries face the following
production possibilities frontiers. Further assume that the two countries produce popcorn and
peanuts.
Country A’s Production Possibilities Frontier Country B’s Production Possibilities Frontier
A. Assume that country A and country B decide to use half of the resources in the production of each
good. Indicate the points of the maximum output of each good on the graphs for each country as
point A under such resource use.
B. Assume the two countries choose autarky and do not trade. W hat would be the total world
production of popcorn and peanuts under the autarky?
C. Assume that each country decides to specialize in either popcorn or peanut based on its
respective comparative advantage. Under the specialization, what is the total production of
popcorn and peanuts?
D. Assume country A and B decide to trade 100 units of popcorn for 100 units of peanuts, show on
the graphs the gain each country receives from trade. Label these points on the two graphs “B.”
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and
with a name that you will remember. Make sure your Assignment is in the appropriate template
provided. Then, when you are ready, you may submit to the Dropbox.
Unit 2 [204]
Page 3 of 3
Unit 2 Assignment: Economic Models and Comparative Advantage
Points
Possible
Points
Earned
Content and Analysis
Problem #1
Effectively explained the difference between absolute advantage and
comparative advantage.
6
Problem #2
Correctly calculated the time it would take to complete the project. (“a”)
6
Correctly computed the comparative advantages of Larry and Kate. (“b”) 6
Identified the gains from trade on the graphs. (“c”)
5
Problem #3
Identified points on the graphs for the use of half of the resources. (“a”)
5
Calculated computed the total production without trade. (“b”) 5
Calculated the total production with trade. (“c”) 6
Explained the gains from trade when the goods have equal value. (“d”) 6
Writing Style, Grammar, and APA formatting. 5
Total 50
Unit7 [BU204]
Page 1 of 4
Unit 7 Assignment: Money, Banks, and the
Federal Reserve System
1. Your Assignment should have a cover sheet with the following information:
● Your Name
● Course Number
● Section Number
● Date
2. You may submit your Assignment using the Unit 7 Assignment template.
3. Your answers should follow APA formatting by being in double-spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your answers
should also be in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your answers should be highly
organized, logical, and focused.
Assignment
This Assignment deals with money, the Federal Reserve System, and the effects of money growth on
the rate of inflation. In this Assignment, assume you are hired as an assistant quantitative analyst at a
bank and one of your duties is calculating reserves and loans based on the total deposits in the bank.
Given the scenarios provided below, complete the tables and explain the computation results. This
Assignment requires a combination of short paragraph answers, computations, and completion of a
450-500 word essay.
This Assignment will assess your knowledge based on the following outcome:
BU204-4: Describe the roles of money, banking, and the Federal Reserve System in the macro
economy.
1) This section deals with increase in money supply given two scenarios (see “a” and “b” below). In
Westlandia, the public holds 50% of money one (M1) in the form of currency, and the required
reserve ratio is 20%.
a) Estimate how much the money supply will increase in response to a new cash deposit of $500 by
completing the accompanying table and calculate the new total money supply.
(Hint: The first row shows that the bank must hold $100 in minimum reserves — 20% of the $500
deposit — against this deposit, leaving $400 in excess reserves that can be loaned out. However,
since the public wants to hold 50% of the loan in currency, only $400 × 0.5 = $200 of the loan will be
deposited in round 2 from the loan granted in Round 1.)
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Unit 7 [BU204]
Page 2 of 4
Round Deposits Required
reserves
Excess
reserves
Loans
Loan proceeds
held as currency
Loan proceeds
deposited
1 $500.00 $100.00 $400.00 $400.00 $200.00 $200.00
2 $200.00
3
4
5
6
7
8
9
10
Totals
b) Estimate how much the money supply will increase in response to a new cash deposit of $500 by
completing the accompanying table and calculate the new total money supply. How does your
answer compare to an economy in which the total amount of the loan is deposited in the banking
system and the public does not hold any of the loans in currency? (Hint: Complete the table below
when none of the loan proceeds are held in currency following the example for row 1.)
Round
Deposits
Required
reserves
Excess
reserves
Loans
Loan proceeds
held as currency
Loan proceeds
deposited
1 $500.00 $100.00 $400.00 $400.00 0.00 $400.00
2 $400.00
3
4
5
6
7
8
9
10
Totals
Unit 7 [BU204]
Page 3 of 4
c) Calculate the Money Multiplier for question 1. a.) based on its computed change in money
supply, and calculate the Money Multiplier for question 1. b.) based on its computed change in
money supply. What does this imply about the relationship between the public’s desire for holding
currency and the money multiplier? Which scenario will contribute more to increase in money
supply?
2) Explain how each of the following situations changes quantity of money (money supply) in the
economy, based on its computed change in money supply.
a) The Federal Reserve System buys bonds
b) The Federal Reserve System auctions credit
c) The Federal Reserve System raises the discount rate
d) The Federal Reserve System raises the reserve requirement
3) Assume that in a country the total holdings of banks were as follows:
Bank Amount in million dollars
Required Reserve $45
Excess Reserve $15
Deposits $750
Loans $600
Treasury Bonds $90
a) Show that the balance sheet balances if these are the only assets and liabilities.
b) Assuming that people hold no currency, what happens to each of these values if the central bank
changes the reserve requirement ratio to 2%, banks still want to hold the same percentage of
excess reserves, and banks do not change their holdings of Treasury bonds?
c) How much does the money supply change by?
4) Complete the following in 450-500 word essay. As an assistant quantitative analyst for this bank,
what can you assume from these results? What recommendations can you provide to your senior
manager on loan rates, depending on the Federal Reserve System’s ratio percentage? What
should the bank do when the Fed raises the discount rate and the Federal Funds Rate? What
should the bank do when the Fed increases and decreases the reserve ratio to change the reserve
requirement?
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and
with a name that you will remember. Make sure your Assignment is in the appropriate template
provided. Then, when you are ready, you may submit to the Dropbox.
Unit 7 [BU204]
Page 4 of 4
Unit 7 Assignment: Money, Banks, and the Federal Reserve
System
Points
Possible
Points
Earned
Content and Analysis
Problem # 1
Correctly completed table under (“a”).
6
Correctly completed table under (“b”). 6
Explained the relationship between the public’s desire for holding
currency and the money multiplier. (“c”)
4
Problem #2
Identified changes in money under scenarios. (“a–d”)
6
Problem #3
Balanced the balance sheet. (“a”)
5
Correctly calculated each value. (“b”) 6
Correctly calculated and explain the change in money supply. (“c”) 6
Problem #4
Recommended appropriate loan rates based on the reserve ratio.
Explained the actions of the banks when the Fed increases the discount
rate and the Federal Funds Rate. Described the actions of banks when
the Fed increases and decreases the reserve ratios.
6
Writing style, grammar, and APA formatting. 5
Total 50
Unit6 [BU204]
Page 1 of 3
Unit 6 Assignment: Economic Growth
1. Your Assignment should include a title page with the following information:
● Your Name
● Course Number
● Section Number
● Date
2. This is a research and writing Assignment, so no template is provided.
3. Your paper should follow APA formatting by including a title page, being in double-spaced paragraph
format, with citations to your sources, and include a list of references on the reference page. Your
paper should have a highly developed viewpoint and purpose, as well as, original and insightful. It
should be logical and unified, and show exceptional organization, style, and mechanics. Your paper
should be written in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your answers should be highly organized,
logical, and focused.
This Assignment will assess your knowledge based on the following outcomes:
BU204-3: Analyze factors that determine long run economic growth by conducting research using
macroeconomic indicators data.
GEL-1.02: Demonstrate college-level communication through the composition of original materials in
Standard English.
GEL-6.05: Adapt research skills to discover and sort relevant sources to complete tasks.
PC-4.1: Assess the value of multiculturalism and diversity in a global environment.
In this Assignment, you will take the role as an assistant researcher to conduct a study on the major
determinants of the variations in the economic growth of countries. Your research must be detailed, and
presented in a 4-page research paper that analyzes factors that indicate the disparities of economic
growth among countries. In addition, you will discuss the value of recognizing and accommodating
multiculturalism and diversity in a globalized economic environment and their roles in promoting long-run
economic growth and development.
The below resources will help you familiarize yourself, or discover, how multiculturalism and diversity play
a significant role in aiding economic growth and development. Then, you will conduct your own research
to analyze factors that determine the disparities of economic growth among
countries.
Diversity has become the characteristics of the majority of the countries in the world. Globalization and
economic interdependence of countries calls for understanding and accommodating diversities. Economic
development theories and empirical studies also widely discuss and debate the impacts of multiculturalism
and diversity on economic growth and development. The positive roles of multiculturalism and diversity in
economic growth and development are praised in democratic countries that have cultivated systems that
accommodate and capitalize on diversities and multiculturalism (see the article below).
Unit 6 [BU204]
Page 2 of 3
Economic benefits of cultural diversity. (n.d.). SGS Economics & Planning.
Retrieved from
https://www.sgsep.com.au/publications/economic-benefits-cultural-diversity
On the other hand, developing countries in Asia, Africa, and Latin America, cultural and religious
diversities are the internal instability, polarization, conflicts, disintegration, etc., which have adverse impact
on economic growth and development. Since the developing countries do not have systems that
effectively accommodate multiculturalism and diversity and dominant ethnic groups control power and
resources, they lead to the lack of equal opportunities and significant socioeconomic gaps in countries
(see the links below for research examples on the issues for Latin America, Asia, and Africa).
Arocena, F., & Porzecanski, R. (n.d.). Ethnic inequality, multiculturalism and globalization: The cases of
Brazil, Bolivia and Peru. Retrieved from
http://www.multiculturalismoenuruguay.com/Docs/Articulos/IJCSArocena
Kivoto, E. (n.d.). Ethnic conflict and its impact on economic development in Africa: A case study of Kenya.
Retrieved from
http://www.academia.edu/11302119/ETHNIC_CONFLICT_AND_ITS_IMPACT_ON_ECONOMIC_DEV
ELOPM ENT_IN_AFRICA_A_CASE_STUDY_OF_KENYA
Read from the Library:
Donnelly, R. (2015). Tensions and challenges in the management of diversity and inclusion in IT services
multinationals in India. Human Resource Management, 54(2), 199–215.
Based on this background information, and research you conduct using the Library and Internet, identify
key factors that determine long-term economic growth by comparing two different countries of your choice.
One advanced economy such as England, Canada, Germany, etc., and the other country is considered a
developing economy, such as Angola, Afghanistan, Bangladesh, etc.
Conduct research to determine how economically different the two countries are, by examining at least
five different economic indicators, such as gross domestic product, gross domestic product per person,
etc., and the differences in at least three of their social indicators, such as population, population per
square kilometer, etc. Then, expand your research into the cultural differences, including political
structure, average education, and social influences, to determine why these two countries are so different
economically.
The first half of your paper will describe, how you determined what data to collect, the sources of that
data, how you sorted that data, the time periods that the data describes, how you chose to analyze the
data, and your resulting conclusions regarding the differences between these two countries. The second
half of your paper will focus on your analysis of the cultural, social, and political diversity between these
two cultures and how these differences contribute to the economic differences you found based on
specific evidence from the data you collected.
Use the Library and databases to conduct your research to identify the key factors that determine long-
term economic growth. You can find the most up-to-date reports on the economic growth trends of
different countries under the World Bank website below.
World Bank. (2017). World development indicators. Retrieved from http://data.worldbank.org/products/wdi
After you have conducted research and read from the above website, access the “Data & Research” tab
in the World Bank website and compare growth rates between two countries of your choice. Specifically,
select one advanced economy, and select one developing economy.
Unit 6 [BU204]
Page 3 of 3
Download their data for five major economic indicators, and three major social indicators from the most
recent five years. Then, identify and describe possible factors that may explain the differences between
the GDP growth rates and long-term economic growth of the advanced and developing economies for the
countries you selected.
Conclude your paper by discussing the value of recognizing and accommodating multiculturalism and
diversity in a globalized economic environment and their roles in promoting long-run economic growth. In
line with the developed and developing countries you selected for your research, discuss the benefits and
challenges, and recommend solutions in regard to multiculturalism and diversity in the two countries and
their impacts on the economy.
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and with a
file name specified by your instructor, or, if none is specified, then a file name that you will remember.
Make sure your Assignment is in the appropriate format (Microsoft Word), then, when you are ready, you
may submit to the Dropbox.
Unit 6 Assignment: Economic Growth Points
Possible
Points
Earned
Content and Analysis
Described what approach in determining what data to collect, the sources of
that data, how the data was sorted, the time periods that the data describes, the
approach chosen to analyze the data, and the resulting conclusions regarding
the differences between the two chosen countries.
10
Correctly identified a developed and a developing country. 10
Correctly identified economic and social indicators data. 10
Provided a detailed discussion of why the growth rates differ across these
countries.
10
Correctly explained relevant cultural, political, and social factors that point to the
cultural differences between both countries.
10
Assessed the impact of cultural diversity on relative economic development of
both countries and how these differences contributed to the economic
differences found based on specific evidence from the data collected.
10
Conclusion: Discussed the value of recognizing and accommodating
multiculturalism and diversity in a globalized economic environment and their
roles in promoting long-run economic growth.
10
Submitted a 4-page research paper. Paper has a highly developed viewpoint
and purpose, as well as, original and insightful. It is logical and unified, and
shows exceptional organization, style, and mechanics. Written in Standard
English with correct spelling, punctuation, grammar, and style. Proper APA
formatting.
5
Total 75
[204] Unit 9 Assignment Template
This Assignment deals with how monetary and fiscal policy instruments are utilized to deal with macroeconomic fluctuations in order to achieve long-run macroeconomic equilibrium through changing the aggregate demand (AD) and Aggregate Supply (AS) in the economy.
1. Refer to the sets of the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves. Use the graphs to explain the process and steps by which each of the following economic scenarios will shift the economy from one long-run macroeconomic equilibrium to another equilibrium. Under each scenario, elaborate the short-run and long-run effects of the shifts in the aggregate demand and aggregate supply curves on the aggregate price level and aggregate output (real GDP).
a. Suppose the household wealth decreases due to a decline in the stock market asset prices (see the set of graphs below and pay attention to the 3-stage shifts in graphs).
b. Assume the government lowers taxes, which increases the household’s disposable income. However, the government purchases (spending) remains the same (see the set of graphs below and shifts in graphs).
2. Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. What kind of gap, inflationary or recessionary gap, will the economy face after the AD shock indicated by the shift in AD curves? What types of fiscal policy instruments will help move the economy back to the potential level of output (real GDP)? Give specific examples.
a. At the long-run macroeconomic equilibrium, the stock market boom occurs and this increases the value of stocks households hold. (See the set of graphs below and shifts in graphs in the two-steps.)
1) What kind of GAP exists (inflationary or recessionary)?
2) Which part of the FED’s Congressional mandate (full employment or stable prices) does this situation trigger?
3) What kind of MONETARY policy might be helpful (increase or decrease money supply)?
4) What kind of FISCAL policy might be helpful (expansionary or contractionary)?
5) What specific FISCAL policy TOOLS can the government employ that would be helpful?
b. The government increases its purchases (spending) due to natural disasters. (See the set of graphs below and shifts in graphs.)
1) What kind of GAP exists (inflationary or recessionary)?
2) Which part of the FED’s Congressional mandate (full employment or stable prices) does this situation trigger?
3) What kind of MONETARY policy might be helpful (increase or decrease money supply)?
4) What kind of FISCAL policy might be helpful (expansionary or contractionary)?
5) What specific FISCAL policy TOOLS can the government employ that would be helpful?
c. Assume the Central Bank reduces the money supply in the economy which leads to an increase in the interest rates. (See the set of graphs below and shifts in graphs.)
1) What kind of GAP exists (inflationary or recessionary)?
2) Which part of the FED’s Congressional mandate (full employment or stable prices) does this situation trigger?
3) What kind of MONETARY policy might be helpful (increase or decrease money supply)?
4) What kind of FISCAL policy might be helpful (expansionary or contractionary)?
5) What specific FISCAL policy TOOLS can the government employ that would be helpful?
Page 3 of 3
Unit5 [BU204]
Page 1 of 3
Unit 5 Assignment: Unemployment and the Cost
of Living
1. Your Assignment should have a cover sheet with the following information:
● Your Name
● Course Number
● Section Number
● Date
2. You may submit your Assignment using the Unit 5 Assignment template.
3. Your answers should follow APA formatting by being in double-spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your answers
should also be in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your answers should be highly organized,
logical, and focused.
Assignment
In this Assignment, you will deal with how to measure the cost of living and rate of unemployment in
the economy.
Economists measure prices in the macroeconomy to generate a consumer price index (CPI) and,
then employ the CPI to compare dollar figures from different points in time and to adjust interest rates
for inflation. This helps measure the change in the cost of living. The labor market is also introduced,
and enables us to see how full utilization of labor resources improves the level of production and the
standard of living. Economists measure the performance of the labor market using unemployment
statistics.
This Assignment will assess your knowledge based on the following outcome:
BU204-2: Explain macroeconomic aggregates such as the GDP, inflation rate, unemployment rate,
and their implications on the national economy.
1) Assume there is a simple economy where people consume only two goods, food and clothing.
Further assume that the market basket of goods used to compute the CPI consists of 100 units of
food and 20 units of clothing.
Yearly Price per Unit Food Clothing
2004 price per unit
$8
$20
2005 price per unit
$12
$40
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Unit 5 [BU204]
Page 2 of 3
a. Compute the percentage changes in the price of food and the percentage change in the price of
clothing between 2004 and 2005.
b. Calculate the percentage change in the CPI between 2004 and 2005.
c. Do you think the CPI price changes affect all consumers in the economy to the same extent? If
not, how do you determine who “wins” and who “loses” in this particular situation? Explain.
2) Calculate how much each of the following items is worth in terms of today’s dollars using 180 as
the price index for today.
a. In 1925, the CPI was 18 and the price of a movie ticket was $0.30.
b. In 1930, the CPI was 14 and a cook earned $20 a week.
c. In 1940, the CPI was 16 and a gallon of gas cost $0.20.
3) The table below uses data for three hypothetical countries. All the number values are in thousands.
a. Complete the following table:
Country Adult
Population
Labor
Force
Employed Unemployed Unemployment
Rate
Labor-Force
Participation
Rate
A 120,000 60,000 4,500
B 28,000 3,000 60
C 70,000 40,000 10
High rate of unemployment in an economy negatively affects individuals, their families, and a nation
as a whole since labor force is a very important productive resource. Based on this background
information and the table you completed under “3a”, answer the following questions.
b. How does the government officially measure employment and unemployment in the economy?
Why is it usually stated that the official unemployment rate likely underestimates the actual
level of unemployment in the economy?
c. Based on the table under “3a”, describe the relationship between employment and economic
well-being in the economy for each country. What are the impacts of labor force utilization and
high unemployment rate on the national economy of country A, B, and C?
4) The following table indicates U.S. real GDP data to answer the following questions.
Year Real GDP (2000
prices) (in millions)
Population
(in millions)
1987 $6,435,000 243
2005 $11,092,000 296.6
a. What is the Real GDP per person in 1987?
b. What is the Real GDP per person in 2005?
c. What is the percent change in Real GDP per person between 1987 and 2005?
Unit 5 [BU204]
Page 3 of 3
5) Now that you have segmented the components of macroeconomic aggregates, explain their
implications on the national economy. Provide examples based on your answers above and explain
how CPI affects consumers, how CPI affects price, the effects of employment and unemployment on
the U.S. economy, and how the changes in living standards could affect employees and the national
economy.
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and
with a name that you will remember. Make sure your Assignment is in the appropriate template
provided. Then, when you are ready, you may submit to the Dropbox.
Unit 5 Assignment: Unemployment and the Cost of Living
Points
Possible
Points
Earned
Content and Analysis
Problem # 1
Computed the growth rates of prices. (“a”)
4
Correctly calculated the CPI. (“b”) 4
Explained the effects of price changes. (“c”) 5
Problem #2
Computed changes in prices using CPI. (“a”)
4
Computed changes in prices using CPI. (“b”) 4
Computed changes in prices using CPI. (“c”) 4
Problem #3
Complete the missing values in the table. (“a”)
4
Explained how the government officially measures employment and
unemployment in the economy. Explained why it is usually stated that the
official unemployment rate likely underestimates the actual level of
unemployment in the economy. (“b”)
4
Described the relationship between employment and economic well-being
in the economy for each country. Described the impacts of labor force
utilization and high unemployment rate on the national economy of
country A, B, and C. (“c”)
4
Problem #4
Calculate the real GDP’s per person and the growth rate.
4
Problem #5
Explained how the changes in the CPI affect average price and
consumers. Described the effects of employment and unemployment on
the U.S. economy. Explained how the changes in the living standard
affect employees and the U.S. economy.
4
Writing style, grammar, and APA formatting. 5
Total 50
[204]
Unit 10 Assignment Template
In this Assignment, your role will be of an assistant researcher in economics. Your job is analyzing the consequences of the changes in fiscal and monetary policy instruments that may be associated with the variations in the U.S. economic conditions. With this in mind, address the following on the effects of monetary and fiscal policies on the aggregate demand (AD) and short run macroeconomic fluctuations that lead to the recessionary gap and inflationary pressure in the U.S. economy.
There are three parts to this Assignment. This Assignment requires a combination of short paragraph answers, computations, and completion of a 450–500 word essay.
One of the main roles of the government is stabilizing the economy to attain macroeconomic goals such as price-level stability, full employment, and economic growth. Macroeconomic fluctuations may occur due to shifts in the aggregate demand (AD) or shifts in the short-run aggregate supply curve (SRAS) (See Figure 1). Therefore, policymakers every so often strive to counterbalance these AD and AS curve shifts by using monetary policy and fiscal policy instruments in an attempt to reach long-run equilibrium by closing the recessionary and the inflationary gaps.
Figure 1
Fiscal Policy
The government utilizes fiscal policy instruments (tools) to stabilize the economy and to achieve full employment, control inflation, and encourage economic growth. Fiscal policy is planned adjustments in the government spending and taxes. This part introduces you to the use of fiscal policy instruments to deal with the two major economic problems of recession (unemployment) and inflation. With this background information, answer the following questions on the uses and the effects of the fiscal policy tools to deal with the recessionary and the inflationary gaps.
Question 1: Fiscal Policy and the Recessionary Gap
Suppose that the U.S. economy is operating below full-employment equilibrium due to the recessionary gap with high rate of unemployment, and the equilibrium point between AD and SRAS occurs below potential real GDP (See Figure 2). Cognizant of the government plan, answer the following questions on the use of fiscal policy tools during the recessionary gap.
Figure 2
a) What is the type of fiscal policy the government uses to close the recessionary gap?
b) What are the fiscal policy instruments available to the policy makers and how would they be used? Explain.
c) What are the effects of each of the fiscal policy instruments designed to fight recessions on the Federal Budget and the national debt?
Question 2: Fiscal Policy and the Inflationary Gap
Suppose the U.S. economy is operating above full-employment equilibrium, which leads to significantly high demand-pull inflationary pressure (see Figure 3). The government plans to use the fiscal policy instruments to close the inflationary gap by shifting the aggregate demand curve. Mindful of this government strategy, answer the following questions on the use of fiscal policy tools during the inflationary gap.
a) What is the type of fiscal policy the government uses to close the inflationary gap?
b) What are the fiscal policy instruments available to the policy makers and how would they be used? Explain.
c) What are the effects of each of the fiscal policy instruments designed to fight inflation on the Federal Budget and the national debt?
Figure 3
Monetary Policy
The Federal Reserve System uses monetary policy that involves making planned changes in the money supply to manipulate interest rates to alter the total level of spending in the economy. The policy goals are achieving price-level stability, full employment, and economic growth. Based on this information, answer the following questions on how the Federal Reserve System applies the monetary policy tools to deal with the recessionary and inflationary gaps.
Question 3: Monetary Policy and the Inflationary Gap
Suppose the U.S. economy is operating above the full-employment equilibrium due to an overspending in the economy with significantly high inflation rates (see Figure 4). The Federal Reserve wants to design policy plans to reduce the high rate of inflation without causing a recession. Based on this underlying assumption, answer the following questions.
Figure 4
a) What is the type of monetary policy the Federal Reserve System can undertake to address the inflationary problem?
b) What are the instruments of monetary policy that the Federal Reserve System uses to close the inflationary gap? Explain.
c) How does management of its money supply enable the Federal Reserve to manage the economy in order to reduce inflationary pressure?
Question 4: Monetary Policy and the Recessionary Gap
Assume the U.S. economy is in a recession operating below potential output (the real GDP) and the Federal Reserve System takes appropriate monetary policy actions to close the recessionary gap (see Figure 5). Anchored in this essential statement, answer the following questions on how the monetary policy tools are used to deal with the recessionary gaps.
Figure 5
a) What is the type of monetary policy the Federal Reserve System utilizes in an attempt to close the recessionary gap?
b) What are the instruments of monetary policy that the Federal Reserve System uses to close the recessionary gap? Explain.
c) How does management of its money supply enable the Federal Reserve to manage the economy in order to reduce recessionary pressure?
Question 5: Fiscal and Monetary Policy Applications
Compose the following in a 450–500 word essay. Now that you have segmented the components on how fiscal and monetary policies can reduce recessionary and inflationary gaps, you must analyze how the consequences of the changes in fiscal and monetary policy instruments may be associated with the variations in the U.S. economic conditions. Provide examples based on your answers above to explain these consequences during a recession, and during inflationary times.
Page 5 of 5
Unit9 [204]
Page 1 of
4
Unit 9 Assignment: Monetary and Fiscal Policy,
Macroeconomic Fluctuations, and
Macroeconomic Equilibrium
1. Your Assignment should have a cover sheet with the following information:
● Your Name
● Course Number
● Section Number
● Date
2. You may submit your Assignment using the Unit 9 Assignment template.
3. Your answers should follow APA formatting by being in double-spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your answers
should also be in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your answers should be highly
organized, logical, and focused.
Assignment
This Assignment deals with how monetary and fiscal policy instruments are utilized to deal with
macroeconomic fluctuations in order to achieve long-run macroeconomic equilibrium through
changing the aggregate demand (AD) and Aggregate Supply (AS) in the ec onomy.
1. Refer to the sets of the aggregate demand, short-run aggregate supply, and long-run aggregate
supply curves. Use the graphs to explain the process and steps by which each of the following
economic scenarios will shift the economy from one long-run macroeconomic equilibrium to
another equilibrium. Under each scenario, elaborate the short-run and long-run effects of the shifts
in the aggregate demand and aggregate supply curves on the aggregate price level and aggregate
output (real GDP).
a. Suppose the household wealth decreases due to a decline in the stock market
asset prices (see the set of graphs below and pay attention to the 3-stage shifts in
graphs).
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Unit 9 [204]
Page 2 of
4
b. Assume the government lowers taxes, which increases the household’s disposable
income. However, the government purchases (spending) remains the same (see the set of
graphs below and shifts in graphs).
2. Suppose the economy of a hypothetical country has reached its long-run macroeconomic
equilibrium when each of the following aggregate demand shocks occurs.
a. At the long-run macroeconomic equilibrium, the stock market boom occurs and this
increases the value of stocks households hold. (See the set of graphs below and shifts in
graphs in the two-steps.)
1) What kind of GAP exists (inflationary or recessionary)?
2) Which part of the FED’s Congressional mandate (full employment or stable prices)
does this situation trigger?
3) What kind of MONETARY policy might be helpful (increase or decrease money
supply)?
4) What kind of FISCAL policy might be helpful (expansionary or c ontractionary)?
5) What specific FISCAL policy TOOLS can the government employ that would be
helpful?
b. The government increases its purchases (spending) due to natural disasters. (See the set
of graphs below and shifts in graphs.)
Unit 9 [204]
Page 3 of 4
1) What kind of GAP exists (inflationary or recessionary)?
2) Which part of the FED’s Congressional mandate (full employment or stable prices)
does this situation trigger?
3) What kind of MONETARY policy might be helpful (increase or decrease money
supply)?
4) What kind of FISCAL policy might be helpful (expansionary or contractionary)?
5) What specific FISCAL policy TOOLS can the government employ that would be
helpful?
c. Assume the Central Bank reduces the money supply in the economy which leads to an
increase in the interest rates. (See the set of graphs below and shifts in graphs.)
1) What kind of GAP exists (inflationary or recessionary)?
2) Which part of the FED’s Congressional mandate (full employment or stable prices)
does this situation trigger?
3) What kind of MONETARY policy might be helpful (increase or decrease money
supply)?
4) What kind of FISCAL policy might be helpful (expansionary or contractionary)?
5) What specific FISCAL policy TOOLS can the government employ that would be
helpful?
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and
with a name that you will remember. Make sure your Assignment is in the appropriate template
provided. Then, when you are ready, you may submit to the Dropbox.
Unit 9 Assignment: Monetary and Fiscal Policy, Macroeconomic
Fluctuations, and Macroeconomic Equilibrium
Points
Possible
Points
Earned
Content and Analysis
Problem 1, Part a
Correctly explained short-run effects on the aggregate price level and
aggregate output.
3
Correctly explained long-run effects on the aggregate price level and
aggregate output.
3
Unit 9 [204]
Page 4 of 4
Unit 9 Assignment: Monetary and Fiscal Policy, Macroeconomic
Fluctuations, and Macroeconomic Equilibrium
Points
Possible
Points
Earned
Problem 1, Part b
Correctly explained short-run effects on the aggregate price level and
aggregate output.
3
Correctly explained long-run effects on the aggregate price level and
aggregate output.
3
Problem 2, Part a
Correctly identified what kind of gap exists.
3
Explained what type of monetary policies would help move the
economy back to potential output.
3
Explained what type of fiscal policies would help move the economy
back to potential output.
3
Problem 2, Part b
Correctly identified what kind of gap exists.
4
Explained what type of monetary policies would help move the
economy back to potential output.
4
Explained what type of fiscal policies would help move the economy
back to potential output.
4
Problem 2, Part c
Correctly identified what kind of gap exists.
4
Explained what type of monetary policies would help move the
economy back to potential output.
4
Explained what type of fiscal policies would help move the economy
back to potential output.
4
Writing style, grammar, and APA formatting. 5
Total 50
Unit10 [BU204]
Page 1 of 6
Unit 10 Assignment: Monetary and Fiscal Policy
1. Your Assignment should have a cover sheet with the following information:
o Your Name
o Course Number
o Section Number
o Date
2. You may submit your Assignment using the Unit 10 Assignment template.
3. Your answers should follow APA formatting by being in double-spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your answers
should also be in Standard English with correct spelling, punctuation, grammar, and style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts, topics,
definitions, and other elements asked for in the questions. Your paper should be highly
organized, logical, and focused.
Assignment
This Assignment will assess your knowledge based on the following outcome:
BU204-5: Analyze how monetary and fiscal policy instruments are used to achieve macroeconomic
goals.
In this Assignment, your role will be of an assistant researcher in economics. Your job is analyzing
the consequences of the changes in fiscal and monetary policy instruments that may be associated
with the variations in the U.S. economic conditions. With this in mind, address the following on the
effects of monetary and fiscal policies on the aggregate demand (AD) and short run macroeconomic
fluctuations that lead to the recessionary gap and inflationary pressure in the U.S. economy.
There are three parts to this Assignment. This Assignment requires a combination of short paragraph
answers, computations, and completion of a 450–500 word essay.
One of the main roles of the government is stabilizing the economy to attain macroeconomic goals
such as price-level stability, full employment, and economic growth. Macroeconomic fluctuations may
occur due to shifts in the aggregate demand (AD) or shifts in the short-run aggregate supply curve
(SRAS) (See Figure 1). Therefore, policymakers every so often strive to counterbalance these AD
and AS curve shifts by using monetary policy and fiscal policy instruments in an attempt to reach
long-run equilibrium by closing the recessionary and the inflationary gaps.
https://kapextmediassl-a.akamaihd.net/business/204/1902C/Assignment_Templates/Unit10_Template x
Unit 10 [BU204]
Page 2 of 6
Figure 1
Fiscal Policy
The government utilizes fiscal policy instruments (tools) to stabilize the economy and to achieve full
employment, control inflation, and encourage economic growth. Fiscal policy is planned adjustments
in the government spending and taxes. This part introduces you to the use of fiscal policy instruments
to deal with the two major economic problems of recession (unemployment) and inflation. With this
background information, answer the following questions on the uses and the effects of the fiscal
policy tools to deal with the recessionary and the inflationary gaps.
Question 1: Fiscal Policy and the Recessionary Gap
Suppose that the U.S. economy is operating below full-employment equilibrium due to the
recessionary gap with high rate of unemployment, and the equilibrium point between AD and SRAS
occurs below potential real GDP (See Figure 2). Cognizant of the government plan, answer the
following questions on the use of fiscal policy tools during the recessionary
gap.
Figure 2
Unit 10 [BU204]
Page 3 of 6
a) What is the type of fiscal policy the government uses to close
the recessionary gap?
b) What are the fiscal policy instruments available to the policy makers and how would they be
used? Explain.
c) What are the effects of each of the fiscal policy instruments designed to fight recessions on the
Federal Budget and the national debt?
Question 2: Fiscal Policy and the Inflationary Gap
Suppose the U.S. economy is operating above full-employment equilibrium, which leads to
significantly high demand-pull inflationary pressure (see Figure 3). The government plans to use the
fiscal policy instruments to close the inflationary gap by shifting the aggregate demand curve. Mindful
of this government strategy, answer the following questions on the use of fiscal policy tools during the
inflationary gap.
a) What is the type of fiscal policy the government uses to close the inflationary gap?
b) What are the fiscal policy instruments available to the policy makers and how would they be
used? Explain
c) What are the effects of each of the fiscal policy instruments designed to fight inflation on the
Federal Budget and the national debt?
Figure
3
Monetary Policy
The Federal Reserve System uses monetary policy that involves making planned changes in the
money supply to manipulate interest rates to alter the total level of spending in the economy. The
policy goals are achieving price-level stability, full employment, and economic growth. Based on this
information, answer the following questions on how the Federal Reserve System applies the
monetary policy tools to deal with the recessionary and inflationary gaps.
Unit 10 [BU204]
Page 4 of 6
Question 3: Monetary Policy and the Inflationary Gap
Suppose the U.S. economy is operating above the full-employment equilibrium due to an
overspending in the economy with significantly high inflation rates (see Figure 4). The Federal
Reserve wants to design policy plans to reduce the high rate of inflation without causing a recession.
Based on this underlying assumption, answer the following questions.
Figure
4
a) What is the type of monetary policy the Federal Reserve System can undertake to address the
inflationary problem?
b) What are the instruments of monetary policy that the Federal Reserve System uses to close the
inflationary gap? Explain.
c) How does management of its money supply enable the Federal Reserve to manage the economy
in order to reduce inflationary pressure?
Question 4: Monetary Policy and the Recessionary Gap
Assume the U.S. economy is in a recession operating below potential output (the real GDP) and the
Federal Reserve System takes appropriate monetary policy actions to close the recessionary gap
(see Figure 5). Anchored in this essential statement, answer the following questions on how the
monetary policy tools are used to deal with the recessionary gaps.
Unit 10 [BU204]
Page 5 of 6
Figure 5
a) What is the type of monetary policy the Federal Reserve System utilizes in an attempt to close
the recessionary gap?
b) What are the instruments of monetary policy that the Federal Reserve System uses to close the
recessionary gap? Explain.
c) How does management of its money supply enable the Federal Reserve to manage the
economy in order to reduce recessionary pressure?
Question 5: Fiscal and Monetary Policy Applications
Compose the following in a 450–500 word essay. Now that you have segmented the
components on how fiscal and monetary policies can reduce recessionary and inflationary gaps,
you must analyze how the consequences of the changes in fiscal and monetary policy
instruments may be associated with the variations in the U.S. economic conditions. Provide
examples based on your answers above to explain these consequences during a recession, and
during inflationary times.
Directions for Submitting Your Assignment
Before you submit your Assignment, you should save your work on your computer in a location and
with a name that you will remember. Make sure your Assignment is in the appropriate template
provided. Then, when you are ready, you may submit to the Dropbox.
Unit 10 [BU204]
Page 6 of 6
Unit 10 Assignment: Monetary and Fiscal Policy
Points
Possible
Points
Earned
Content and Analysis
Question 1, part a.
Correctly explained the type of fiscal policy used to for a recessionary gap.
3
Question 1, part b.
Correctly explained how each fiscal policy tool is used in a recession.
4
Question 1, part c.
Correctly explained the impact of recessionary fiscal tools on the Federal
Budget and national debt.
3
Question 2, part a.
Correctly explained the type of fiscal policy used to for an inflationary gap.
3
Question 2, part b.
Correctly explained how each fiscal policy tool is used in an inflationary gap.
4
Question 2, part c.
Correctly explained the impact of inflationary fiscal tools on the Federal
Budget and national debt.
3
Question 3, part a.
Correctly explained the type of monetary policy used to for an inflationary
gap.
3
Question 3, part b.
Correctly explained how each monetary instrument helps close the
inflationary gap.
4
Question 3, part c.
Correctly explained how changing the money supply impacts inflation.
3
Question 4, part a.
Correctly explained the type of monetary policy used to for a recessionary
gap.
3
Question 4, part b.
Correctly explained how each monetary instrument helps close the
recessionary gap.
4
Question 4, part c.
Correctly explained how changing the money supply impacts a recession.
4
Question 5
Analyzed the impacts of the changes in the fiscal and monetary policy tools
on the U.S. economy. Explained the effects of the fiscal and monetary policy
tools during recessions and inflationary times.
4
Writing style, grammar, and APA formatting. 5
Total 50