The objective of this paper is to understand fiscal policy and monetary policy and apply them to a particular firm to see how the policies can pertain to the real world. This is the first draft of final paper you will submit at the end of the course. This draft of the paper is due by the end of Week 4. You will have a chance to revise the paper for a better grade after you get my comments. Failure to submit a first draft by the deadline will cost your 10% of your grade.
These are the questions you need to address in this part of the paper. However, DO NOT submit your paper as a question and answer session but in the form of an essay with properly formatted headings and subheadings.
1. Explain the effects of fiscal policies on the economy's production and employment. How do changes in government spending and taxes positively or negatively impact the economy's production and employment?
2. Select a firm that you are interested in. In not more than 2-3 pages, provide a general overview of the firm. In particular, talk about the strengths, weaknesses, threats and opportunities that the firm faces.
3. Analyze the impact of expansionary fiscal policy on the firm you selected for the previous question. What would be the impact on this firm if the government were to increase government spending? What would be the impact of a decrease in taxes on this firm? In your opinion, which tool of fiscal policy (government spending or taxes) would be more effective for this firm? Why?
4. Explain how the central bank manages a nation's monetary system.
5. Explain the effects of monetary policies on the economy's production and employment.
6. Outline the stated direction of recent monetary policy in the US.
7. List at least one policy action that the Federal Reserve has taken to confirm that direction.
8. What would be the effect on the firm you selected above of this monetary policy action?
You can consult the www.federalreserve.gov website for help with the questions on monetary policy. Read the most recent Monetary Policy Report to the Congress located under the Testimony and Speeches section of the website.
Make sure you carefully read the Checklist provided for the paper and follow instructions in the checklist.
The paper should be about 10-15 pages long. All papers must be typed, double spaced, 12-point font.
All papers must have citations as well as references (or works cited). What is the difference between the two?
When you get ideas from a source that is not your own, you must give credit. This is a citation and can take the form of a footnote or a parenthetical citation at the end of the paragraph/sentence as in the example below:
- With obesity concerns gripping the nation many non-exercisers have turned to cycling as a leisure activity that helps fight the battle of the bulge. Cycling is a great low impact way to increase your heart rate and burn calories with out causing undue strain and pressure to your joints and muscles. This is especially important with an ageing baby boom population seeking an easier way to stay fit (Foley, 2005).
- Remember that citations are not required only when you are directly quoting from a source. Even if you "borrow" an idea from a source but paraphrase it in your own words you must give credit. Otherwise you are trying to pass off someone else's ideas as your own. And that is plagiarism. A plagiarized paper will get a grade of zero.