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ECO/372 Week4 Short-Run Economic Fluctuations

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ECO/372  Week4 Short-Run Economic Fluctuations

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 how monetary policy affects interest rates and aggregate demand.
  • Analyze how fiscal policy affects interest rates and aggregate demand.
  • Evaluate why policymakers face a short-run trade-off between inflation and unemployment.
  • Evaluate why the inflation-unemployment trade-off disappears in the long run. 

Format your paper consistent with APA guidelines. 

 

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