Purpose
of Assignment
to help develop an
understanding of what money is, what forms money takes, how the banking system
helps create money, and how the Federal Reserve controls the quantity of money.
Students will learn how the quantity of money affects inflation and interest
rates in the long run, and production and employment in the short run. Students
will find that, in the long run, there is a strong relationship between the
growth rate of money and inflation. Students will review the basic concepts macroeconomists
use to study open economies and will address why a nation’s net exports must
equal its net capital outflow. Students will demonstrate the relationship
between the prices and quantities in the market for loanable funds and the
prices and quantities in the market for foreign-currency exchange. Student will
learn to analyze the impact of a variety of government policies on an economy’s
exchange rate and trade balance.
Assignment
Steps
Resources:National
Bureau of Economic Research (http://www.nber.org/links/gov.html)
Develop a 2,100-word economic outlook forecast that
includes the following:
·
Analyze the history of changes
in GDP, savings, investment, real interest rates, and unemployment and compare
to forecast for the next five years.
·
Discuss how government
policies can influence economic growth.
·
Analyze how monetary policy
could influence the long-run behavior of price levels, inflation rates, costs,
and other real or nominal variables.
·
Describe how trade deficits or
surpluses can influence the growth of productivity and GDP.
·
Discuss the importance of the
market for loanable funds and the market for foreign-currency exchange to the
achievement of the strategic plan.
·
Recommend, based on your above
findings, whether the strategic plan can be achieved and provide support.
