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General Instructions;1. Your assignment should have a cover sheet with the following information;a. your name;b. the course number;c. the section number, and;d. the date;2. Copy and paste the questions into your paper.;3. Copy and paste the appropriate graphs into your work, then add whatever arrows, or other;indicators that you feel are necessary to illustrate your analysis.;4. Your answers should follow the APA format by being in double spaced paragraph format, with;citations to your sources and, at the bottom of your last page, a list of references). You answers;should also be in Standard English with correct spelling and punctuation, grammar and style.;5. Unless specified differently by your instructor, your completed assi gnment should be saved with;the following file name format: course number, an underscore, Section number, an underscore, your;LAST name, underscore, your FIRST name, an underscore, and the word final. It will look like this;BU204_xx _LAST_FIRST_final (where the xx is the section number).;6. 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.;1;Unit 9;[BU204 | Macroeconomics];7. Maximum grade on format (total 15 points);3 points = correct filename;3 points = correct APA format for answers (coversheet with name, course number, section number;Unit number, date, answers double spaced, in Times Roman black 12 point font);3 points = correct citations within answers;3 points = Standard English with no spelling or punctuation errors;3 points = correct references at the bottom of the last page.;--------------------------------------------------------------------------------------------------------------------Questions;1. Define the key terms below as they are defined in the textbook and explain, in your own words;what those definitions mean to you (5 points), and then thoroughly analyzes each situation to answer;the following questions Use the diagrams below, resizing them as necessary, to illustrate your;analysis in explaining what happens to private savings, private investment spending, and the rate of;interest if the following events occur. Assume the economy is closed.;a. The government reduces the size of its deficit to zero (10 points).;2;Unit 9;[BU204 | Macroeconomics];b. At any given interest rate, consumers decide to save more. Assume the budget balance is zero;(10 points).;c. At any given interest rate, businesses become very optimistic about the future profitability of;investment spending. Assume the budget balance is zero (10 points).;2. Define the key terms below as they are defined in the textbook and explain, in your own words;what those definitions mean to you (5 points), and then thoroughly analyzes each situation to answer;the following questions;Using aggregate demand, short-run aggregate supply, and long-run aggregate supply curves, explain;the process and causes by which each of the following economic events will move the economy from;one long-run macroeconomic equilibrium to another. Use the diagrams below, resizing them as;necessary, to illustrate your analysis. In each case, what are the short -run and long-run effects on the;aggregate price level and aggregate output?;3;Unit 9;[BU204 | Macroeconomics];a. There is a decrease in households wealth due to a decline in the stock market (15 points).;b. The government lowers taxes, leaving households with more disposable income, with no;corresponding reduction in government purchases (15 points).;3. Define the key terms below as they are defined in the textbook and explain, in your own words;what those definitions mean to you (7 points), and then thoroughly analyzes each situation to answer;the following questions;a. An economy in a hypothetical country is in long-run macroeconomic equilibrium when each of the;following aggregate demand shocks occurs. What kind of gapinflationary or recessionarywill the;economy face after the shock, and what type of fiscal policies, giving specific examples, would help;move the economy back to potential output?;a. A stock market boom increases the value of stocks held by households (8 points).;4;Unit 9;[BU204 | Macroeconomics];b. Firms come to believe that a recession in the near future is likely (8 points).;c. Anticipating the possibility of war, the government increases its purchases of mili tary equipment (8;points).;d. The quantity of money in the economy declines and interest rates increase (8 points).;5;Unit 9;[BU204 | Macroeconomics];4. The table below shows the United States components of M1 and M2 in billions of dollars for the;month of December in the years 1998 to 2007 as published in the 2008 Economic report of the;President.;Yea;r;Currency Traveler' Checkabl;in;s checks e;circulatio;deposits;n;Mone;y;mark;et;funds;Time;deposits;smaller;than;$100,00;0;Saving;s;deposit;s;199;8;460.5;8.5;626.5;728.9;952.4;517.8;8.6;596.2;819.7;956.8;531.2;8.3;548.0;908.0;1,047.6;1,878.8;200;1;581.2;8.0;592.6;962.3;976.5;2,312.8;200;2;626.3;7.8;585.6;885.3;896.0;2,778.2;662.5;7.7;635.9;818.7;Currency Currency;in;in;circulation circulation;as a;as a;percentag percentag;e of M1;e of M2;1,740.3;200;0;M;2;1,605.0;199;9;M;1;3,169.1;200;6;Unit 9;[BU204 | Macroeconomics];3;200;4;777.4;697.6;7.5;671.2;697.1;829.9;3,518.3;200;5;723.9;7.2;643.4;699.9;995.8;3,6721.;4;200;6;748.9;6.7;611.4;799.4;1,170.4;3,698.6;200;7;759.0;6.3;599.2;976.1;1,216.8;3,889.8;a. Complete the table by calculating M1 (5 points), M2 (5 points), currency in circulation as a;percentage of M1 (5 points), and currency in circulation as a percentage of M2 (5 points). W hat;trends or patterns about M1, M2, currency in circulation as a percentage of M1, and currency of;circulation as a percentage of M2 do you see (5 points)? What might account for these trends (12;points)?;5. Considering the flow of money throughout a countrys economy and the importance of the proper;level of money supply, answer the following questions.;a. Discuss how money is created within the banking system (15 points);b. Discuss how in the United States, the Federal Reserve uses monetary policy to control the money;supply. (17 points);6. After experiencing a recession for the past two years, the residents of Albernia were looking;forward to a decrease in the unemployment rate. Yet after six months of strong positive economic;growth, the unemployment rate has fallen only slightly below what it was at the end of the recession.;a. How can you explain why the unemployment rate did not fall as much although the e conomy was;experiencing strong economic growth? (15 points);7;Unit 9;[BU204 | Macroeconomics];b. Explain how and why the unemployment rate fluctuates with the inflation rate as is depicted in the;Short-Run Phillips Curve. (17 points);8

 

Paper#26552 | Written in 18-Jul-2015

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