This assignment covers the following course outcomes
Describe how a market economy functions and the relationships of its major subdivisions or aggregates, such as the government, households, and business sectors. Emphasis will be placed on the U.S. Economy and its linkages to the global economy (CO1)
Construct and interpret economic graphs (CO2)
Explain how macroeconomic issues relate to the government`s policy decisions (CO3)
Identify the tools of fiscal and monetary policies (CO4)
Analyze economic policies and predict their effects, especially regarding relating theory to real world situations (CO5)
Review what you have learned about business cycles, GDP, unemployment, CPI, monetary policy, and fiscal policy and respond to the following:
How did GDP, unemployment, and the cost of living change during the last recession? Be sure to provide aggregate statistics from the appropriate government sources.
How was fiscal and monetary policy used to reduce the recessionary gap? Be sure to provide specific examples.
What were the expected benefits of the policies adopted? What were the potential costs of the policies adopted?
What phase of the business cycle is our economy currently in? Be sure to use current aggregate statistics to support your answer.
The paper must be typewritten in Microsoft Word. It must be double-line spaced and should not be longer than three pages.
Review the SBT Textbook Activity (Weekly Assignment) Rubric located in the "Start Here" section of the course for more information on grading criteria. Keep the following points in mind:
Analysis of the economy during the last recession and currently is based upon macroeconomic data.
Examples of expansionary fiscal and monetary policies employed during the recession are accurate.
The potential costs and benefits of expansionary policies are based upon economic theory.
Schiller, Macro Economy Today:
Chapter 11: Fiscal Policy
Chapter 15: Monetary Policy
View the following videos:
Fiscal Policy [Video File 00:48 mins] From Title: Moyers & Company: Ending the Silence on Climate Change:
Government Spending, Jobs, and Unemployment [Video File 02:43 mins] From Title: Teaching Tools for Macroeconomics, Government, and International Trade:
The Great Recession Name Institutional Affiliation The Great Recession How a Market Economy Functions Market economies function in a manner that is based on the supply and demand principles, allowing very little intervention and or interaction from government regulation. The theory that drives a market economy is the response that the market gives to the supply and demand changes, which through competition, product prices shift towards a certain equilibrium. In the United States and other governments whose economies are mixed, the government is charged with the responsibility of influencing the supply and demand of products through price controls and subsidiaries coupled with regulations (Schiller, 2011). The Relationships Market Economy with its major subdivisions or aggregates The interaction of a market economy and its market aggregates is reflected in the market`s investment decisions as well as the alloc