Money and the Prices in the Long Run and Open Economies – economic outlook.
National Bureau of Economic ResearchPurpose of Assignment
Week 3 will help students develop an understanding of what money is, what forms money takes, how the banking system helps create money, and how the Federal Reserve controls the quantity of money. Students will learn how the quantity of money affects inflation and interest rates in the long run, and production and employment in the short run. Students will find that, in the long run, there is a strong relationship between the growth rate of money and inflation. Students will review the basic concepts macroeconomists use to study open economies and will address why a nation’s net exports must equal its net capital outflow. Students will demonstrate the relationship between the prices and quantities in the market for loanable funds and the prices and quantities in the market for foreign-currency exchange. Students will learn to analyze the impact of a variety of government policies on an economy’s exchange rate and trade balance.
Resources: National Bureau of Economic Research
Develop a 2,100-word economic outlook that includes the following:
- Using data from the above link to the NBER, and other sources, analyze the history of changes in U. S. GDP, Inflation, and Unemployment and compare to each of their forecasts for the next five years.
- Discuss how government policies, such as fiscal and monetary, can influence economic growth.
- Analyze how monetary policy could influence the long-run behavior of inflation rates, and other real or nominal variables.
- Describe how trade deficits or surpluses can influence the growth of productivity and GDP.
- Discuss the importance of the market for loanable funds and the market for foreign-currency exchange to our economic growth.
- Recommend, based on your above findings, what the government should do to encourage economic growth
Use a minimum of three sources. See rubric
Format your paper consistent with APA guidelines.