The topic: Choose a current macroeconomic issue in the United States or another

Question

The topic:

Choose a current macroeconomic issue in the United States or another country, and write a policy brief to the president or to policy makers. Ideally, your policy brief should try to:

Summarize the macroeconomic issue or problem facing the country

Summarize at least two opposing views on the solutions

Summarize basic economic theory behind the each view

Conclude the paper with your own recommendation for the president

Suggestions

You can pick any macroeconomic issue you like: unemployment, the budget deficit, monetary policy, income inequality, inflation, trade deficit, or any other topic. But be sure to use economic theory, and to cover more the one side of the debate.

Explanation / Answer

Major mcroeconomic issue faced in any country is the Inflation as the inflation causes the real value of money down. Inflation will cause all the price to go up. If that happens the consumption of the items will drop and which in turn leads to the drop in GDP of the country. It also leads to minimization of private savings and government has to involve in subsidising the prices.

When central bank try to keep the monetary policies tighter, it can control inflation but the unemployment will go up. They are inversely related. By the Philips Curve, If the central bank tightens inflation, then automatically it loosns the unemployment.

So the Recommedation for the President: As the monetary policy lies with the control of the central bank, focus on the fiscal policy. Ease the trade by providing the export and import subsidies to increase the supply of goods at the point of inflation so that the ctizens get benefitted.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.