Macroeconomics Honors

Read Federal Reserve Chairman Yellen's speech here*(https://www.federalreserve.gov/newsevents/testimony/yellen20160621a.htm)

For additional information go here(https://www.federalreserve.gov/monetarypolicy/mpr_default.htm)and read the "Current Report: June 21,, 2016," you may find it easier to download the PDF but that is up to you.

Since we have not learned about monetary policy yet you will not be expected to evaluate the "Monetary Policy" arguments later in the testimony or to read and incorporate monetary policy from the Current Report.

Apart from what you know about X and M you will not be expected to evaluate her views on the international economy and her remarks about exchange rates beyond what you already know

Please discuss:

• How does she see the "patient's" health? Use all you know about the diagnosis from "vital signs" to closeness or otherwise to the edge of the PPF and why that is important. Note instances where health is evaluated on an historic and forward-looking basis. Use quotes and evaluate

• List all demand side and supply side issues in the speech and the report. For each one explain it and provide a quote. Show the economic analysis with diagrams (see blackboard to use pre-made diagrams) and how the issue you are addressing affects the 4 economic objectives.

How I will mark the assignment:

• Each quote well-explained (your uncle wants to know) up to 3 marks

• Up to a further 5 marks for the analysis of each quote(I expect diagrams and at least some reference to the data, screenshots of the data you are discussing would be good)

• Explanation of how the issue you are discussing is relevant to AD and AS and therefore to the overall health of the patient

• Further 2 marks for evaluation of different possible outcomes if appropriate.