ECO 372 Week 4 Short-Run Economic Fluctuations

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ECO 372 Week 4 Short-Run Economic Fluctuations
ECO 372 Week 4 Short-Run Economic Fluctuations
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ECO 372 Week 4 Short-Run Economic Fluctuations

Purpose of Assignment 

Students will example the model economists use to analyze the economy’s short-run fluctuations–the model of aggregate demand and aggregate supply. Students will learn about some of the sources for shifts in the aggregate-demand curve and the aggregate-supply curve and how these shifts can cause fluctuations in output. Students will be introduced to actions policymakers might undertake to offset such fluctuations. Students will see why there is a temporary trade-off between inflation and unemployment, and why there is no permanent trade-off. 

Assignment Steps 

Resources: National Bureau of Economic Research 

Select an organization your team is familiar with or an organization where a team member currently works. 

Create a 15- to 20-slide Microsoft® PowerPoint® presentation to present to the organization’s Executive Committee.

Include the following items: 

  • Identify the three key facts about short-run economic fluctuations and how the economy in the short run differs from the economy in the long run.

  • Explain economic fluctuations and how shifts in either aggregate demand or aggregate supply can cause booms and recessions using the model of aggregate demand and aggregate supply. (Explain the theory behind the concept and then address how it can be applied to the case of your selected organization — how is your organization affected by these shifts in AD and AS?)

  • Explain how monetary policy affects interest rates and aggregate demand. (Explain the theory behind the concept and then address how it can be applied to the case of your selected organization — how does monetary policy affect your organization?)

  • Analyze how fiscal policy affects interest rates and aggregate demand. (Explain the theory behind the concept and then address how it can be applied to the case of your selected organization — how does fiscal policy affect your organization?)

  • Evaluate why policymakers face a short-run trade-off between inflation and unemployment. (How does your organization deal with this trade off?)

  • Evaluate why the inflation-unemployment trade-off disappears in the long run. 

Make use of Speaker Notes for explanations.

Format your presentation consistent with APA guidelines. 

Click the Assignment Files tab to submit your assignment.