ECO 202 Project
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Southern New Hampshire University *
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202
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Economics
Date
Feb 20, 2024
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docx
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ECO 202 Project Template
Economic Summary Report
Table of Contents
1.
Introduction
2.
Fiscal Policies: Taxation
3.
Fiscal Policies: Government Expenditure
4.
Monetary Policies
5.
Global Context
6.
Conclusions
7.
References
Introduction
For the benefit of the incoming administration, I submit this report to document, analyze, and interpret the macroeconomic policy decisions I made as the chief economic policy advisor of Econland. The purpose of this document is to further our national prosperity by deepening our understanding of the relationship between macroeconomic policies and their consequences for our citizens. The report includes a thorough accounting of the major fiscal and monetary policy decisions made over each of the seven years of my term, as well as an explanation of the underlying rationales for those decisions and the resulting impacts of those policies.
Table 1.1
The table above summarizes the macroeconomic climate of Econland over my term.
Table 1.1 shows the results from my 7-year tenure in charge of Econland’s economy in the
stagnation category of the simulation. Over time, I proceeded to introduce several modifications to gauge their effect on the economy. The cost of borrowing, net capital outflow, and various other factors can be influenced by a country's interest rate, which appears to be the benchmark for assessing economic growth. This, in turn, can facilitate the formulation of policies on government budgeting and taxation (Mankiw, 2021). Eventually, I implemented a substantial alteration that led to a small growth in the economic state. Throughout my term, my approval rating maintained an average of 65%.
Fiscal Policy: Taxation
Table 2.1
My objective in devising taxation policies was to encourage equitable contributions from all parties, including individuals and businesses. To that end, creating a fair system that could fund vital government services was at the forefront of my approach. I utilized economic principles like supply and
demand and marginal taxation to establish an unbiased taxation process. Additionally, applying the concept of elasticity of demand allowed me to formulate a system that would generate sufficient revenue without placing undue strain on individuals and businesses.
Corporate tax rates can powerfully impact a business's profits and motivate specific investments
and behaviors. Amendments to income tax rates can alter the funds individuals and households have at their disposal, ultimately influencing the economy. Additionally, changes to these tax rates can affect a government's revenue, which assists in financing public services. As taxes decrease, people have more money to expend, possibly stimulating consumption. Decreased taxes can fuel investment from businesses and subsequent economic growth. While lowering taxes could also lead to government revenue reduction, constraining the administration's ability to finance public services.
The impact of lower taxes on the economy can be multi-faceted, with the potential to stimulate growth while decreasing government revenue and ultimately leading to budget deficits. These effects were observed in notable instances, such as the Reagan tax cuts ("Reagan tax cuts", 2023) and the Bush tax cuts ("Bush tax cuts," 2023), which created economic growth but harmed the budget balance. Conversely, the Clinton administration's tax increases ("Economic policy of the Bill Clinton administration," 2023) positively impacted economic growth and a budget surplus.
Precisely accurate macroeconomic predictions were made for specific policy changes. This was exemplified by the Reagan tax cuts, where the models prognosticated that the cuts would lead to slower
economic growth and an increased budget deficit, which indeed occurred. A similar forecast for the Clinton tax increases predicted economic growth and budget surplus, which subsequently ensued.
Fiscal Policy: Government Expenditure
Figure 3.1
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Related Questions
Part 1
Please analyse the various components of AD for India. Track the GDP growth of India pre and post COVID.
Analyse the reasons for any changes in the growth rates.
Compare the growth of India with two advance economies and two emerging economies.
PART 2
Mention and evaluate the demand management policies that have been taken by the Indian Government.
You are encouraged to look into the data published by the central bank and statistical organisations of the country. Also please use the appropriate graphs to support your analysis.
arrow_forward
Please select 2 countries and investigate the relationship
between Financial Development and Economic Growth. In
this project, you are expected to explain the following
issues:
1- Why these 2 countries?
2- What is the relationship between growth and
financial development? (Hint: Financial Development
could be proxied by the Financial Development Index)
While explaining what you found with data, you are
expected to support your findings with at least 3 studies
in the literature.
You are limited to a maximum 3 pages.
arrow_forward
Localization economies
include all of the other options
are effects captured by sectors in the
economy as they grow within an area
may take the form of forward and
backward linkages
are agglomeration effects
Question 40
The theory outlining a negative relationship
between land size and productivity assumes,
none of the other options
that the land is owned by poor
individuals who cultivate it.
that large pieces of land in developing
countries are owned by absentee
landlords.
that the land is owned and cultivated by
large negligent multinational
corporations
arrow_forward
please solve all the subparts
arrow_forward
You want to explain Canada's GDP. You have quarterly data on GDP in current dollars from 2005 to 2020, Canada's population (in thousands of people), the trade deficit and the inflation rate.
(b) What other regresors should you include in this model? Give at least two examples and explain why you think that they would be relevant in this model.
arrow_forward
The impact of covid-19 on USA economy.
GDP, unemployment, gdp growth, investment
arrow_forward
In two sectoral economy reflect if the revenues generated by one sector are equal to the expenditures of the other sector using circular flow diagram. (150-500 Word limit)
arrow_forward
Need help with Macroecomics multiple choice question!
14. What is an important reason for the rise in prices (inflation) in Canada since 1913. a)The Government of Canada keeps increasing prices according to a pre-determined formula. b) The prices of raw materials have increased due to global warming and its associated environmental effects. c)Canada no longer backs its currency with gold.d) None of the above.
15. Which of the following policies is LEAST likely to cause economic growth?(A) The extraction and export of natural resources.(B) Government investment in roads and electricity.(C) Making it easier for businesses to legally register.(D) Government monopolization of the financial industry.
arrow_forward
Economics
In terms of Classical Economics and not Keynesian:
World trade has boosted growth rates in many
countries. In around 1980, mainland China opened
its economy to trade and foreign investment. The
Chinese also implemented many institutional
reforms promoting capitalism.
1) Calculate Chinese pre-reform cumulative and
annualized growth rates from 1950 to 1979.
2) Calculate Chinese post-reform cumulative and
annualized growth rates from 1980 to 2019.
3) Please explain the differences in your calculated
numbers using the changes the Chinese
government implemented.
Hint: Use Classical Economic fundamentals to
determine the pre-reform cumulative and
annualized growth rates for the above years and
then explain them. The GDP and growth rates can
be found online in many different places.
arrow_forward
Principles of Macroeconomics "T1301102"
Student name:
First Exam- PART2, 13/0372021
St #
Question
(20
points)
Refer to the table below, answer the questions that follow:
Personal consumption expenditures
Government purchases-
Net private domestic investment
Exports
Imports
Depreciation
Receipts of factor income from the rest of the world
Payments of factor income to the rest of the world
600
100
200
50
-60
40
30
50
1 The value for GDP is
2. The value for GNPIS
3. The value for NNP is
4. The value of NI is
(30 points)
Question 2
A- Discuss therelationship between ourput, unemployment, & inflation.
arrow_forward
With lockdowns currently imposed across Europe and North America until mid-April, even in the best-case scenario it will take at least until mid-June for market confidence to be restored in these economies. The implication is that nearly six million workers in Bangladesh’s formal sector – which is largely manufacturing – will be without steady work for an extended period.”
a) Which part of the production function do you think the issue mentioned above will affect? Draw two diagrams to show Real GDP and LRAS is affected in the long run.
The government should also consider an unconditional cash transfer program for an initial period of three months at a rate of $95 per month, which corresponds to the minimum wage for the formal sector in Bangladesh. This would cost the government roughly $14 billion, or 4% of GDP. While this sort of cash transfer program always suffers from targeting issues, Bangladesh enjoys a highly sophisticated mobile financial services network, which could…
arrow_forward
QUESTION 3
(15 mks)
Comprehensively and clearly discuss the working of the Kenyan economy based on
the circular flow in an economy below;
investment
financial
sector
goods and services
savings
consumption spending
taxes
government
spending
>business firms
households
income
expofts
resources
imports
foreign sector
arrow_forward
Economic and business environment analysis:
a) What are the Demographics: Population, growth rate in germanyb) What is the Per capita income levels in germanyc) What are the Major exports and trading partners in germanyd) What is the Business environment like: Government attitude to foreign investment and trends, ease ofdoing business, trade regulations in germanye) What is the Inflation levels, currency exchange rate; risks of devaluation versus the dollar in germanyf) What is the Education and literacy levels, availability of skilled labor, labor costs in germany
This information must be linked to the product ( time and patience bakery bread)
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Question Completion Status:
QUESTION 4
Refer to the table (all figures in billions of dollars). The personal income (PI) for this economy is
#:
Items
Amount
(i)
(1)
Personal Taxes
$40
(2)
Social Security Contributions
$15
(3)
Taxes on Production and Imports
$20
(4)
Corporate Income Taxes
$40
(5)
Transfer Payments
$22
(6)
U.S. Exports
$24
(7)
Undistributed Corporate Profits
$35
(8)
Government Purchases
$90
(9)
Gross Private Domestic Investment
$75
(10)
U.S. Imports
$22
(11)
Personal Consumption Expenditures
$250
(12)
Consumption of Fixed Capital
$25
(13)
Net Foreign Factor Income
$10
(14)
Statistical Discrepancy
$0
O $314
O $346
O $402
O $408
O $437
arrow_forward
For a good or service to be counted in a given year's gross domestic product (GDP), what four criteria must be met?
have a market value, be a final good or service, be produced within a given country, and be produced within a certain time frame
have a market value, be a final good or service, be produced within a given country, and be produced independent of any set time frame
have a market value, be an intermediate or final good or service, be produced within a given country, and be produced within a certain time frame
have a market value, be a final good or service, be produced within a given country or in another country with whom they have established trade relations, and be produced within a certain time frame
arrow_forward
The three major macroeconomic goals are: Group of answer choices
a) global security, low taxes, and high levels of government services.
b) high employment, price level stability, and economic growth. c)balanced economic growth, balanced federal budget, and exports greater than imports. d)high wages, low imports, and price level stability.
arrow_forward
Good Day,
Kindly assist me with the following case study.
arrow_forward
principle of economy
arrow_forward
The ________ function is the mathematical representation of the technological relationship between national output and inputs.
Group of answer choices
aggregate production
net export
saving
consumption
arrow_forward
Final output in the economy is pro-
duced using capital K and labor L. The production function is:
Y = ĀK/ L^/5
Assume that the supply of all inputs are exogenous and equal to L and K. Perfectly compet-
itive firms are price-takers and choose how much capital and labor to demand by maximizing
profits. Let w and r denote the wage and rental rate of one unit of labor and capital respec-
tively.
arrow_forward
Wages,
dividends, interest,
rent = $500
Households Consumer
spending
= $400
Taxes
= $100
Factor
markets
Government
Goods and
services
markets
Wages,
dividends, interest,
rent = $500
Firms
Imports
= $30
Government
purchases of Exports
= $30
goods and
services
= $100
Reference: Ref 7(22)-1 Figure 7-1: Circular-Flow Model
Rest of
world
(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow
Model. If the circular-flow model is in equilibrium (the sum of money
flowing into each box is equal to the sum of the money flowing out of
it) and there is a decrease in exports, holding everything else constant,
which outcome is likely to occur?
A) a decrease in the nominal GDP
B) an increase in the real GDP
C) a decrease in the unemployment rate
D) an increase in the inflation rate
arrow_forward
Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate – Inflation rate – Population growth
rate
-
-
This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this
rate. However, the simplified equation both is easy to use and results in small error terms when inflation, nominal GDP growth, and
population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP
deflator, and population over two years.
Year
2017
2018
Nominal GDP
$1,100,000
GDP Deflator
100
105
Real GDP (2017 dollars)
$1,100,000
$1,142,857
Population
1,000
1,005
$1,200,000
Instructions: For part b, round your answers for dollar values to two decimal places (dollars and cents). For parts c-d, round your
answers to one decimal place.
a. Are the real GDP values in the table above accurate? (Click to select)
b. This country's real GDP per capita for 2017…
arrow_forward
q7
arrow_forward
Good Day,
Kindly assist me with solving this econ query. Any assistance would be appreciated.
arrow_forward
_________ is output per hour in the business sector.
Question options:
a) GDP per capita
b) Investment
c) Productivity
d) Net exports
____________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in thefirst half of the 1800s.
Question options:
a) Industrial Revolution
b) Capital deepening
c) Living standard
d)Technology
arrow_forward
Unprecedented floods impacted the Australian economy in 2022. After defining the GDP, identify:
One economic mechanism by which floods have increased the Australian GDP (even if they were detrimental to well-being).
One economic mechanism by which floods have decreased the Australian GDP.
arrow_forward
Use the information in the table to answer the following questions. All numbers are in billions of 2012 dollars
Planned
Government
Net Exports
Real GDP (Y)
Consumption (c)
Investment (I)
Purchases (G)
(NX)
$5,000
$4,500
$500
$700
- $500
S6,000
$5,300
$500
$700
- $500
S7,000
$6,100
S500
$700
- $500
$8,000
$6,900
$500
$700
- $500
S9,000
$7,700
S500
$700
- $500
The equilibrium level
GDP is $ billion.
The MPC is (enter your response to two decimal places).
Suppose that net exports increase by $400 billion. Using the multiplier formula, determine the new level of GDP.
A $400 billion increase in net exports leads to a change in spending of $ billion, so the new level of GDP will be
$ billion.
arrow_forward
answer fast
arrow_forward
Read the following extract and answer questions?South Africa’s economy grew by 1.1% in the first quarter of the year Stats SA has published the latest gross domestic product (GDP) data covering the first quarter of the year, showing that the economy grew by 1.1% in the first three months of 2021.The growth follows a revised 1.4% rise in real GDP in the fourth quarter of 2020. On an annualised basis, theeconomy grew 4.6% quarter-on-quarter. Following confusion caused by the annualisation of GDP data in 2020 – amid the Covid-19 pandemic andresulting lockdowns – Stats SA said it would no longer use the annualised data as the headline GDP statistic. During periods of steady economic growth, annualising is a useful way of expressing quarter-on-quarterperformance in annual terms, Stats SA said. However, during periods of economic instability, annualising can be misleading, because it exaggerates growth rates that are unlikely to be repeated.
Given the information about the South African…
arrow_forward
Broader measures of economic prosperity and wellbeing
advise your client on some other metrics of wellbeing that we need to pay attention to when assessing a country’s overall improvement in quality of life over the long term.
Explain to your client why it is important to consider additional indicators of well-being in addition to the conventional economic indicators.
Choose two alternative measures of economic prosperity and wellbeing that are used internationally and provide a brief explanation of what they measure.
Source data on these two measures for your country and note how your country compares to other countries elsewhere in the world according to these measures.]
arrow_forward
Reference equation: Real GDP per capita growth rate ■ Nominal GDP per capita growth rate - Inflation rate - Population growth
rate
This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this
rate. However, the simplified equation both is easy to use and results in small error terms when inflation, nominal GDP growth, and
population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP
deflator, and population over two years.
Year
2017
Nominal GDP
$1,100,000
2018
GDP Deflator
100
104
Real GDP (2017 dollars)
$1,100,000
$1,153,846
Population
1,000
1,005
$1,200,000
Instructions: For part b, round your answers for dollar values to two decimal places (dollars and cents). For parts c-d, round your
answers to one decimal place.
a. Are the real GDP values in the table above accurate? Yes, they are accurate.
b. This country's real GDP per capita for…
arrow_forward
Reference equation: Real GDP per capita growth rate = Nominal GDP per capita growth rate
rate.
-
Inflation rate – Population growth
This equation is an approximation of the exact rate of growth of GDP per capita, and so it results in some errors when calculating this
rate. However, the simplified equation is both easy to use and results in small error terms when inflation, nominal GDP growth, and
population growth are low, and so it is a useful approximation. The table below lists a fictional country's nominal GDP, real GDP, GDP
deflator, and population over two years.
Year
2019
2020
Nominal GDP
$1,100,000
$1,200,000
GDP deflator
100
102
Real GDP
(2019 dollars)
$1,100,000
$1,176,471
Population
1,000
1,005
a. Verify that the real GDP values in the above table are accurate.
Instructions: Round your answers to one decimal place.
b. This country's real GDP per capita for 2019 is $
This country's real GDP per capita for 2020 is $
c. The growth rate in this country's real GDP per capita…
arrow_forward
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