Unit 10 [BU204] Page 1 of 6 Unit 10 Assignment Mon.docx

Unit 10 [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/Uni
t10_Template.docx
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]

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.
the inflationary gap?
makers and how would they be

used? Explain
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
System utilizes in an attempt to close
Reserve System uses to close the
recessionary gap? Explain.
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
Unit 9 [204]
Page 1 of 4
Unit 9 Assignment: Monetary and Fiscal Policy,
Macroeconomic Fluctuations, and
Macroeconomic Equilibrium
● Your Name
● Course Number
● Section Number
● Date

answers should be highly
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).
t9_Template.docx
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
or decrease money
supply)?
or contractionary)?
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.)
or decrease money
supply)?
or contractionary)?
helpful?
Dropbox.
Macroeconomic

Fluctuations, and Macroeconomic Equilibrium
Points
Possible
Points
Earned
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

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
4
4
economy
4
Problem 2, Part c

4
4
economy
4
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. Fiscalpolicy 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
makers and how would they be used? Explain.
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.
the inflationary gap?

makers and how would they be used? Explain.
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

System can undertake to address the inflationary problem?
Reserve System uses to close the inflationary gap? Explain.
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
System utilizes in an attempt to close the recessionary gap?
Reserve System uses to close the recessionary gap? Explain.
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
Unit 5 [BU204]
Page 1 of 3
Unit 5 Assignment: Unemployment and the Cost
of Living
● Your Name
● Course Number
● Section Number

● Date
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.
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
t5_Template.docx
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.
Dropbox.

Unit 5 Assignment: Unemployment and the Cost of Living
Points
Possible
Points
Earned
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
Total 50
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.)
employment or stable prices) does this situation trigger?
or decrease money supply)?
or contractionary)?

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.)
or contractionary)?
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.)
or contractionary)?
Page 3 of 3

Unit 6 [BU204]
Page 1 of 3
Unit 6 Assignment: Economic Growth
1. Your Assignment should include a title page with the
● 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,
answers should be highly organized,
logical, and focused.
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/IJ
CSArocena.pdf

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.

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
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
Unit 7 [BU204]
Page 1 of 4
Unit 7 Assignment: Money, Banks, and the
Federal Reserve System
● Your Name
● Course Number
● Section Number
● Date

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.

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.)

t7_Template.docx
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?
Dropbox.
Unit 7 [BU204]
Page 4 of 4
Unit 7 Assignment: Money, Banks, and the Federal Reserve
System
Points
Possible
Points
Earned
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
Total 50
Unit 2 [204]
Page 1 of 3
Unit 2 Assignment: Economic Models and
Comparative Advantage
● Your Name
● Course Number
● Section Number
● Date

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?

t2_Template.docx
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.”
Dropbox.

Unit 2 [204]
Page 3 of 3
Unit 2 Assignment: Economic Models and Comparative
Advantage
Points
Possible
Points
Earned
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
Unit 8 [204]
Page 1 of 4
Unit 8 Assignment: Aggregate Supply and
Aggregate Demand (AS-AD) Model

● Your Name
● Course Number
● Section Number
● Date
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?
t8_Template.docx
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?

Dropbox.
Unit 8 Assignment: Aggregate Supply and Aggregate Demand
(AS-
AD) Model
Points
Possible
Points
Earned
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
Total 50

Unit 3 [BU204]
Page 1 of 6
Unit 3 Assignment: Supply and Demand Model
and PPF
● Your Name
● Course Number
● Section Number
● Date

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.
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.

t3_Template.docx
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:
Pound
USA Quantity of Lobster Demanded
(pounds)
$25 200
$20 400
Unit 3 [AB204]
Page 3 of 6
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:
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.

Dropbox.
Unit 3 Assignment: Supply and Demand Model and PPF Points
Possible
Points
Earned
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
Total
75
Unit 4 [204]
Page 1 of 3
Unit 4 Assignment: National Income
Determination

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.
t4_Template.docx
Unit 4 [204]

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?
Dropbox.
Unit 4 [204]
Page 3 of 3

Unit 4 Assignment: National Income Determination Points
Possible
Points
Earned
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

Total 50
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?
Page 2 of 2

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?

of 2
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

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

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?

of 3
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
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?
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.
Page 2 of 3
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:
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:
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.
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 FrontierCountry 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.”
Page 1 of 2

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.

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.
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?

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