1) Explain what will happen in a nation that tries to solve a structural unemployment problem using expansionary monetary and fiscal policy. Draw one AD/ AS diagram, based on the Keynesian model, for what the nation hopes will happen. Then draw a second AD/ AS diagram, based on the neoclassical model, for what is more likely to happen (if drawing your answer is a challenge, please describe your answers in words and/or numbers). 2) Explain why the government might prefer
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1) Explain what will happen in a nation that tries to solve a structural
2) Explain why the government might prefer to provide incentives to private firms to do investment or research and development, rather than simply doing the spending itself?
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- Use the conversation part to answer (B) part. ALEX: Hi, Becky. I’m intrigued to see how macroeconomics allows us to explain recent economic events such as the Great Recession that affected so many people. But there’s one thing I don’t understand. Was the collapse of the housing bubble the only cause of the recession, or were there other factors as well? BECKY: Hi, Alex. I agree that macroeconomic theory offers an entirely new perspective on how the economy works. To answer your question, the crash of the housing market was a major factor but not the only cause of the Great Recession. The professor mentioned that the __________ (options: financial, fiscal, government) system deteriorated as well, an event that deepened the economic downturn even further. ALEX: I see. So the bursting of the housing bubble caused the initial decline in aggregate demand. Then the financial crisis caused aggregate demand to decline even more. Could you also help me understand how to use the aggregate demand…One practical limitation of the Classical or Neoclassical model is that it suggests allowing the economy to self-correct in the long run, but recessions may last a very long time. How severe is this problem and why? What is one example?You are a fresh graduate who is being interviewed by an investment bank for a position of analyst. In order to assess your capabilities, the bank has asked you to conduct a macroeconomic analysis. The analysis should lead to a recommendation where you recommend a country for stock market investment. More specifically, you are required to do the choosing Brasil and Argentina 1. Identify at least ten macroeconomic variables. a. Chose the variables in a way that they help you in making good recommendation. 2. Compare the chosen macroeconomic variables over the last five years. a. It is really important for you to utilize charts to show the behavior of chosen variables. b. It is probably better to put both countries on the same chart so that the reader can see how the two countries are doing against each other.
- In Spring 2020, the U.S. economy once again found itself in an economic crisis, this time due to the COVID-19 pandemic. Which approach did the U.S. government follow in regards to the economy—Keynesian or Neoclassical? Explain.Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. Your Policy Brief needs to consider the impacts of the pandemic on economic inequality. To analyse this…Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. The Australian Bureau of Statistics (ABS) reports that the household saving ratio in Australia increased…
- Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. 1) Fiscal policy and managing government budgets Your Policy Brief needs to provide some background…Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. c. In last year’s Budget (2022-23), the previous Australian Treasurer Josh Frydenberg announced that the…Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. The large increase in Government spending to support the economy during the pandemic contributed to a large…
- Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. This year’s Budget (2023-24) was delivered by the new Australian Treasurer Dr Jim Chalmers in May 2023. This…The current Ukraine-Russia War threatens the prosperity of the global economy, and as such, the UK economy. You are working as an Economist for the HM Treasury and a panel of Members of Parliament have asked you to provide guidance on the current situation of the economy and potential demand side and supply side policy interventions to stabilise the economy. Using economic theory, answer the following: a. Discuss how this global event, outlined above, could cause actual growth to deviate away from its potential output in the UK. Why could it be suggested that there maybe longer run impacts to the UK's productive capacity? b. To what extent could deviations in UK real output and the interest rate cause changes in the equilibrium and disequilibrium level of unemployment?The current Ukraine-Russia War threatens the prosperity of the global economy, and as such, the UK economy. You are working as an Economist for the HM Treasury and a panel of Members of Parliament have asked you to provide guidance on the current situation of the economy and potential demand side and supply side policy interventions to stabilise the economy. Using economic theory, answer the following: a. Discuss how this global event, outlined above, could cause actual growth to deviate away from its potential output in the UK. Why could it be suggested that there maybe longer run impacts to the UK's productive capacity? b. To what extent could deviations in UK real output and the interest rate cause changes in the equilibrium and disequilibrium level of unemployment? c. "Any volatility in output and unemployment because of the War would be due to slow market adjustment. Domestic policymaking should be focussed towards re-correcting any longer run rigidities over short run demand…