economics for business
The third assessment covers macroeconomic topics. It is a research essay
This is assessment 3: Written Assessment: Research Essay
Length 3,000 words
Please note that this question requires substantial research (see the assessment criteria below).
(a) Explain the monetary policy in country of Slovenia (Europe). Are there different views as to how monetary policy affects the economy of your county compared to Australia? Explain the major tools the central bank uses to implement monetary policy and control the supply of money. (6 marks)
(b) Using your home country as a case study outline the most recent discretionary fiscal policy and analyse how government stabilised the economy. (10 marks)
(c) Using your case study examine the most recent supply-side fiscal policy. Analyse the effect of such policy on inflation, output and employment. (6 marks)
Additional marks (8 marks)
Substantial research and analysis. 4 marks
Overall presentation of work, especially use of graphs, clear written expression. 2 mark
Appropriate use of referencing. 2 marks
Provide real life examples and use real data where appropriate.
Besides the textbook (Layton, Robinson and Tucker, Economics for today), you should also refer to a few other academic books, journal articles and relevant websites in answering these questions.
Sources must be acknowledged and a list of references provided.
Concepts must be defined accurately and completely.
The assumptions upon which the analysis is based must be stated at the onset.
Critical analysis should be provided by relating economic theory to real life economic examples and the case study
Diagrams must be drawn properly, correctly labelled and the relations they depict explained.
Answers must be complete, addressing the specific tasks nominated in the questions.
Assignment is based on chapters 11 t0 18 of textbook Economics for today, the chapters include the following topics:
– Measuring the size of the economy (GDP, measuring GDP, The Expenditure approach, GDP shortcomings as a measure of economic welfare, other national accounts, relationship between community (national) savings and investment, nominal and real GDP)
– Business cycles and economic growth (the business cycle, total spending and the business cycle, economic growth, endogenous growth model, macroeconomic policy)
– Inflation and unemployment (measurement of inflation, consequences of inflation, economics and ethics (corruption), demand-pull and cost-push inflation, inflation, unemployment, unemployment rate, types of unemployment, non-monetary and demographic consequences of unemployment, inflation and unemployment)
– Simple model of the macro economy (classical theory and Keynesian revolution, four key expenditure components of aggregate demand, aggregate demand – output model, aggregate demand – aggregate supply model, aggregate demand curve, reasons for the aggregate demand curve’s shape, non-price level determinants of aggregate demand, the aggregate supply curve, three ranges of the aggregate supply curve, changes in the AD-AS macroeconomic equilibrium, equilibrium shifts arising from aggregate supply shifts, cost-push and demand-pull inflation revisited)
– Monetary and financial system (money, desirable properties of money, demand for money, four money-supply definitions, the equilibrium interest rate, monetary policy and interest rate, monetary policy and prices and output and employment, a modern financial system, banking system, sharemarket)
– Macroeconomic policy 1: monetary policy (the goals of monetary policy and implementation, transmission mechanism, rules vs discretion debate, velocity, monetary targeting, RBA operation, foreign exchange market)
– Macroeconomic policy2: fiscal policy ( discretionary fiscal policy, balanced budget multiplier, automatic stabilisers, supply-side fiscal policy, the federal budget, the macroeconomic significance of the budget, implications of the budget outcome for government debt levels, national debt)
– International trade and finance (comparative and absolute advantage, free trade, fair trade and protectionism, fair trade and strategic trade, political economy of reducing barriers to trade, arguments for protection, free trade agreements, the balance of payments, current accounts, Slovenia’s (European’s) exchange rate)
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