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Econ 545 Project 2 - Macroeconomic Analysis




Question;ECON545: Project 2?Macroeconomic Analysis;The;Macroeconomic Paper tests your ability to apply economic principles to a;business decision considering the impact of macroeconomic variables. Select one;situation from the items outlined below: A to D. Complete the paper on the;selected situation as specified below. The completed paper is a professional;report and is due in Week 6 (260 Points). See the grading rubric at the end of;this document. Be sure to use the DeVry library to find data, and avoid;questionable sources, such as Wikipedia.;Each;of the scenarios has a list of Macroeconomic areas you are to address, with;sources, in your answer. Briefly you are to research and show how these apply;to your scenario: GDP growth rate (20 points), the business cycle (30 points);fiscal policy and level of unemployment (50 points), monetary policy and;interest rates (50 points), international trade (40 points), and demographics (20;points).;Situation A;Rick;your friend, runs a small manufacturing plant that produces parts for the auto;industry. Rick is thinking of expanding his operations to meet the increasing;demand from car manufacturers. Hearing of your taking this course in business;economics, he asks you for advice on how to go about making the expansion;decision.;At;first you are reluctant to give investment advice, but then you happen to read;the piece ?U.S. Auto Sales Estimates Cut as Confidence Slows Rebound? on page;634 of the textbook. You suddenly realize that Rick needs to take a number of;macroeconomic variables into consideration for the expansion decision. You;decide to research the economy in terms of GDP growth rate, interest rates;level of unemployment, the business cycle, fiscal policy, monetary policy, international;trade, and demographics. You want to provide Rick with the most informed advice;possible.;Situation B;Your;neighbor Cindy wants to start a contracting business for installing solar;panels. She has heard of the cost savings that households and businesses can;make each year by installing solar panels on their roofs. Cindy has also heard;of government incentives for installing solar panels. Being concerned about the;environment and wishing to reduce pollution, Cindy thinks installing solar;panels also serves a good social purpose. But she does not want to risk her;life savings on a venture that might not succeed or become profitable enough.;After hearing from you about taking this course in business economics, she;decides to ask you for advice.;At;first you are hesitant to give investment advice. Then you read the piece ?Postal;Service Considering Cutting 120,000 Jobs? on page 668 of the textbook. You;realize there are more pieces to the decision than Cindy is considering. You;decide to research the economy in terms of GDP growth rate, interest rates;level of unemployment, the business cycle, fiscal policy, monetary policy;international trade, and demographics. You want to provide Cindy with the most;informed advice possible.;Situation C;Cousin;Edgar is always thinking of the next business idea. This time, he plans to;invest in buying four gas stations. He reckons American consumers have come to;accept the high gasoline prices, and estimates world prices for gasoline to;increase even further with high demand from India and China. Besides, Cousin;Edgar thinks he will make a good profit on the sale of convenience items at;each station. But before buying the gas stations, he decides to ask for your;advice because you are taking this course in business economics.;You;happened to read the piece ?Bank Lending Signals a Strengthening Economy? on;page 856 of the textbook. Cousin Edgar needs financing for his new business, but;you realize there are more macroeconomic factors he needs to consider in timing;his decision. You decide to research the economy in terms of GDP growth rate;interest rates, level of unemployment, the business cycle, fiscal policy;monetary policy, international trade, and demographics. You want to provide;Cousin Edgar with the most informed advice possible.;Situation D;After;hearing of your taking this course in business economics, Uncle Dan has e-mailed;you asking for advice on his 100-acre corn farm. He mentioned how, after 30;years of growing corn, he wishes to leave that commodity?s market and enter a;more profitable market instead. He is thinking of subdividing his land and;building homes and shops. He reckons he could make a good profit by selling the;homes and renting the shops.;Before;you can find time to answer Uncle Dan?s e-mail, you read the piece ?Will the;Fed?s New Policies Revitalize the Housing Market?? on page 896 of the textbook.;Recognizing the costs and risks for Uncle Dan in making the switch, you decide;to research the economy in terms of GDP growth rate, interest rates, level of;unemployment, the business cycle, fiscal policy, monetary policy, international;trade, and demographics. You decide to educate yourself about macroeconomics so;that you can provide Uncle Dan with the most informed advice possible.;Macroeconomic Paper as a;Professional Report;Your;paper should be organized into five parts as listed below.;Title Page: Name, class, and dateIntroduction to situation but do NOT copy;the scenario.Briefly summarize the situation and identify the macroeconomic;issue(s) to be decided from the perspective of the organization.;Relevant Economic Principles: Determinants;of Demand, Supply, etc. and Relevant Data;Identify the variables that are;critical in addressing the issue(s). Gather and present the relevant data on;the variables by searching the DeVry Online Library. Ask a librarian for help;if needed. Use in-text citation to report the source(s) of the data. Graphs may;be included here.;Recommendations and Economic Justification;Formulate and present your;recommendations for addressing the issue(s) based on the relevant data and;economic principles identified above. Justify your recommendations in terms of the;economic impact on those affected.;References;List the full;references for at least five sources alphabetically in APA format.;Grading Rubric;Section;Points earned;Points;Description;Paper;Presentation;10;Good format;citations, lack of spelling errors, etc., correct Title page and Reference;page;Relevant Data;GDP, Business;Cycle, International, Monetary Policy, Fiscal Policy, Demographics;210;GDP (20 points);Business Cycles;Unemployment, Inflation (30 points);International (40;points);Monetary Policy;and interest rates (50 points);Fiscal Policy and;unemployment (50 points);Demographics (20;points);Recommendations;40;What are your;recommendations explained by your analysis?;Total;260


Paper#56949 | Written in 18-Jul-2015

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