Macroeconomics

Part I

Directions: Please write a paper that is at least two to three pages in length in which you address the question below.  Write your paper in APA format with at least one peer-reviewed scholarly reference.

1. In the most recent recession of 2008 and 2009, the United States saw a declining GDP, rising unemployment, and, sometimes, deflation.  Please describe these variables during the 2008 and 2009 recession and in the subsequent years.  What type of fiscal and monetary policy is appropriate to fight the recession?

Analyze these using the Phillips curve and economic theory.  Research and describe some of the policies that were used by the U.S. government and central bank.  Were these policies successful?

Part II: Final Reflection Paper

1. Using the LIRN library, search for an article on fiscal and monetary policy and the negative impact policy can have on the equilibrium of prices.  Then, identify ways that a free market society can avoid the negative impact and maintain both production and price.  Your submission must be at least two pages in length and in APA format.

PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A GOOD DISCOUNT

Consider the following headline: U.S. consumer spending up 0.4 percent in January while income increased 0.3 percent

Published March 03, 2014

Associated Press

According to the NBC Learn clip  Consumer Confidence Hits Five-Year High, how does optimism and certainty about the economy affect consumer spending? Synthesizing the concepts of consumer confidence and aggregate demand, describe how spending can bring an economy out of a recessionary gap and whether increased spending is justified even if incomes don’t keep up.

1. Watch the Youtube video on ”The Crisis of Credit Visualized” which explains the role of Financial Institutions in 21st Century.

https://www.youtube.com/watch?v=bx_LWm6_6tA

Briefly explain the role of Investor Bankers and the concept of Collateralized Debt Obligations/Sub prime mortgages.

2.Watch this Film from St. Lawrence College Library on ”House of Cards: America’s Mortgage Meltdown”

http://fod.infobase.com/PortalPlaylists.aspx?wID=113988&xtid=40551&loid=76169

Briefly answer the following questions

a. What was the economic impact of Subprime crisis?

b. What was the plan of Alan Greenspan,Chairman,Federal Reserve?Why he proposed it?  Do you think the plan led to the Housing Crisis.

c. What is the Outline of Credit Crisis in US housing market in 2007?5. What are Collateralized Debt Obligation? How Narvik, the Ice Free Port in Norway related to the Wall Street?

d. Who is Daniel Sadak?

e. What is the Role of Greed in Market Collapse ?

3.Watch the Youtube video on ”Bitcoin:Top 10 basic facts”.

1. Consider the following statement: “China’s current account surplus implies that China has added more to global supply of output than to global demand.” Does a current account surplus necessarily imply the stated outcome for global supply and demand?

2. Explain the role of China’s administered exchange rate in contributing to its trade surpluses and therefore growth in the global supply of goods relative to demand.

3. We saw that exports from China have effectively lowered relative wages for unskilled and semi-skilled workers in advanced countries. What has been the effect on wages in China? Explain these forces in terms of the “factor price equalisation theorem” in international trade theory. Do these forces also apply to other factor prices?

4. Karl Marx said in 1867 in Volume 1 of “Capital” “..commodities are only definite masses of congealed labour time”. To what extent is this true of the export of goods and services rather than by importing labour directly (immigration)

5. What are the underlying forces that have accelerated the process of globalisation in recent decades and are continuing to do so?

6. What specific policies could China and the US adopt to reduce their saving-investment imbalances and therefore their current account imbalances? What political obstacles would each country face in implementing each policy?

Question 1. Is the value of a house built in 2000 and resold in 2008 included in the GDP of 2008? Why or

why not? Would the services of the real estate agent who helped sell (or buy) the house in 2008 be counted in GDP for 2008? Why or why not?

Question 2. What components of GDP (if any) would each of the following transactions affect? Explain.

1. A family buys a new refrigerator.
2. A firm buys 50 new robots for one of its existing plants.

Question 3. Below are some data from the land of milk and honey.

1. Compute nominal GDP, real GDP and the GDP price index for each year, using 2005 as the base year.

Question 4. Use the data in the following table to calculate the GDP price index for each year (values are in billions of dollars).

1. Calculate the GDP price index for each year.

Question 5. If the quantity of final goods and services produced decreased, could real GDP increase?

Could nominal GDP increase? If so, how?

CHAPTER  9

Question 6. The Bureau of Labor Statistics announced that in July 2005, of all adult Americans,

142,076,000 were employed, 7,497,000 were unemployed, and 76,580,000 were not in the labor force. Use this

information to calculate:

1. the labor force
2. the unemployment rate

Question 7. A person’s nominal income rises from $20,000 to $24,000, and the CPI increases from 100 to 108. How much does real income rise/ fall?

Question 8. Use the following data to calculate the Unemployment Rate.

Full-time employed           80

Part-time employed          25

Unemployed                     15

Discouraged workers         5

CPI                              117.4

Question 9. If the CPI was 184.6 in 2003 and 190.6 in 2004, what is the inflation rate for 2004?

Question 10. If the Unemployment Rate is 7.6% and there are 8.4 million people officially unemployed, how many people are in the labor force?