Reference no: EM132683514
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:
1. 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.
2. 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.
3. Explain how monetary policy affects interest rates and aggregate demand.
4. Analyze how fiscal policy affects interest rates and aggregate demand.
5. Evaluate why policymakers face a short-run trade-off between inflation and unemployment.
6. Evaluate why the inflation-unemployment trade-off disappears in the long run.
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