short run economic fluctuations 7

Purpose of Assignment

Students will examine and apply the model economists use to analyze the economy’s short-run fluctuations–the model of aggregate demand and aggregate supply. The student 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. The student will be introduced to actions policymakers might undertake to offset such fluctuations. The student 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

Class, this is an extension of the Weeks 2 and 3 team project, however, note this is an individual assignment. Using the same organization or firm as the Week 2 and 3 projects, complete the following items:

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 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.
  • For Full points all areas must include an application to the selected firm or organization from the Weeks 2 and 3 team project firm or organization.

Format your paper consistent with APA guidelines.

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