Posted: May 13th, 2018

trident eco202 module 3, 4, and 5 cases

module 3
case study

Macro-economic
choices, particularly in the areas of fiscal policy, are not just about
economics but about political philosophies, values and goals. This Case asks
you to think about some of these dimensions.
1. Do all
government purchases have the same effect on aggregate demand? Defend your answer
with economic reasoning.
2.
Suppose a country increases government purchases by $100 billion. Suppose the
multiplier is 1.5 and the economy’s real GDP is $5,000 billion.
a. In
which direction will the aggregate demand curve shift and by how much?
b. Why is
the change in real GDP is likely to be smaller than the shift in the aggregate
demand curve?
3. Read
the Case in Point: Crowding Out in Canada in Section 12.3 (.web-books.com/eLibrary/NC/B0/B62/061MB62.html”>click here) and answer the following:
a. What
is “crowding out,” and how does it reduce private investment?
b. Given
that only certain types of government expenditures crowded out private
investment, what are the implications for fiscal policy choices?
Case
assignment expectations:
Use
information from the modular background readings as well as any good quality
resource you can find. Make sure you cite all resources you use and provide a
reference list at the end of your paper.
LENGTH: 4
typed and double-spaced pages.
In
addition to the overall quality, depth, grammar, and organization of the paper,
the following will, in particular, be assessed:
1.
Analytical skills that allow you to draw conclusions, questions 3,4 and 5 on
federal budget projections.
2.
Critical thinking skills, question 5, on formulating policy about budgetary
matters.

module 4
case study

Money
supply and interest rates are important to individuals and businesses making
decisions to finance purchases. The following articles assess conditions for
financing purchases and important aspects of monetary policy. Read both and
respond to the four questions in a 4 to 5 page report.
1. The
Federal Reserve policy makers use several different tools to influence the
money supply and interest rates. Identify and briefly describe these tools.
Include in your answer the difference between expansionary and contractionary
monetary policies.
2. Define
and explain the three lags discussed in monetary policy. For each type identify
a problem caused by the lag.
3. If the
economy is operating below its potential output, what kind of gap exists? What
kinds of fiscal or monetary policies might you use to close this gap? Can you
think of any objection to the use of such policies? (using information from
module 3 as well).
Case
assignment expectations:
Use
information from the modular background readings as well as any good quality
resource you can find. Make sure you cite all resources you use and provide a
reference list at the end of your paper.
LENGTH:
4-5 typed and double-spaced pages.
In
addition to the overall quality, depth, grammar, and organization of the paper,
the following will, in particular, be assessed:
1. The
level understanding of the link between Federal Reserve actions and its affect
on interest rates and monetary policy
2. Your
ability to understand the link between current and prospective economic
conditions and making decisions about major long-term financial commitments.
module
5case
study

The Two
Branches of Macro-Economic Theory
Thinking
like a Mac ro-Economist:
John
Maynard Keynes and Milton Friedman
Macro-economics
is perhaps the most divisive area of economics when applied to political
decision making, and macro-economists divide themselves into different schools
of thought. Two of the biggest camps are the Keynesians and the Monetarists.
Keynesians and post-Keynesians follow the theories of John Maynard Keynes, the
most-celebrated economist of the 20th century who proposed that
government stabilize the economy with the use of fiscal policy. Monetarists, on
the other hand, follow the teachings of Friedrich Hayek. For this assignment do
some research on the ideas of Keynes and Hayek. Focus on the “big
picture” of what their main ideas are and how they have influenced policy
makers. Then write a 4 to 5 page paper addressing the following questions:
1. a.
Discuss the policies that Keynes and Hayek advocated regarding how the federal
government should manage the economy. What are the major differences between
each school of thought.
b. Based
on your answer to question #1a, which of the two economists would you agree
with more? Explain.
2. Read
Case in Point 3: Steering on a Difficult Course in section 17.3 of the online
text (link .web-books.com/eLibrary/NC/B0/B62/086MB62.html”>here).
a. Why
did people believe the difficulties Asian economies were experiencing in
1997–1998 might bring a recessionary gap to the United States?
b. In
dealing with the recession of 2008 why is it important for the Fed and Congress
to coordinate monetary and fiscal policy measures?
3.
Compare the rationale of the Reagan administration for the 1981 tax reductions
with the rationale behind the Kennedy–Johnson tax cut of 1964, the Bush tax cut
of 2001, and the Bush tax cut of 2003.
Case
Assignment Expectations:
LENGTH:
4-5 typed and double-spaced pages.
In
addition to the overall quality, depth, grammar, and organization of the paper,
the following will, in particular, be assessed:
1. Use
information from the modular background readings as well as any good quality
resource you can find. Make sure you cite all resources you use and provide a
reference list at the end of your paper.
2. Your
ability to apply the concepts and knowledge learned in this course to formulate
your own ideas about resolving economic difficulties.

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