Money and the Prices in the Long Run and Open Economies
****Please follow the attached grading rubric closely. Format with APA 6th Ed. This means that every bullet point in the assignment instructions should have a heading within the paper. Site all parts of references in accordance with APA.****
Purpose 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. Student will learn to analyze the impact of a variety of government policies on an economy’s exchange rate and trade balance.
Assignment Steps
Resources: National Bureau of Economic Research
Develop a 2,100-word economic outlook forecast that includes the following:
Analyze the history of changes in GDP, savings, investment, real interest rates, and unemployment and compare to forecast for the next five years.
Discuss how government policies can influence economic growth.
Analyze how monetary policy could influence the long-run behavior of price levels, inflation rates, costs, 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 the achievement of the strategic plan.
Recommend, based on your above findings, whether the strategic plan can be achieved and provide support.
Use a minimum of three sources.
Format your paper consistent with APA guidelines.
20180520143215eco372_r10_money_and_the_prices_in_the_long_run_and_open_economies_guide_week3
Solution Preview
Money and the Prices in the Long-Run and Open Economies
Introduction
Gross Domestic Product has remained the sole measure of economic growth for a long time in the American economy. It refers to the value of a country’s output and is usually a measure of the market value of a country’s final goods and services in monetary value over a period. Calculation of a country’s GDP involves the addition of consumption to the government spending, the country’s total investment and finally the capital expenditure required. GDP is a measure of a country’s economic growth, and the value varies according to factors like political stability and environmental factors among others (Johnson, 2013).
(2,271 words)