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Assignment is being done on this criteria A. Currency fluctuations are a natural outcome of the floating exchange rate system that is the norm for...

Assignment is being done on this criteria

A.   Currency fluctuations are a natural outcome of the floating exchange rate system that is the norm for most major economies. The exchange rate of one currency versus the other is influenced by fundamental and technical factors. 1. Relative supply and demand of the two currencies, economic performance, outlook for inflation, interest rate differentials, capital flows, technical support and resistance levels. Factors are in state of perpetual flux, currency values fluctuate from one moment to the next. My conclusion is how the currency exchange will effect economic growth (GDP).

B.    References

Lioudis, Nickolas. "Economic Factors That Affect the Forex Market." Investopedia, Investopedia, 26 June 2018,

Waqas, Javed. "How Does Forex Trading Affect the Economy?" PacForex, 8 June 2017,

C.    I will tackle the basic formula for economic growth GDP

a.      C + I + G + (X-M)

                                                             i.     C = consumption

                                                           ii.     I = Cpaital Investment by business and households

                                                         iii.     G = Government spending

                                                         iv.     (X - M) = exports minus imports (net exports) 


1.       Use a theory or concept from Chapter 18 or 19 to discuss the impact of a recent or proposed trade policy change on the macroeconomic economy. You will need to identify a specific policy. You can use the model for loanable funds/net capital outflow/market for foreign-currency exchange or another model or concept. Be sure to discuss the impact on the macroeconomic not a specific industry (e.g., tariffs on aluminum or steel if chosen, should talk about the impact exchange rates and/or net capital flow.)


2.      Use the Aggregate Demand and Aggregate Supply model to analysis tax reform. Your answer should consider impact on output (GDP) and inflation. It should also have a sentence or two to discern whether the impact is in the long-run or short-run.

3.      Argue for or against the Federal Reserve's proposal to hike the targeted federal funds rate twice more this year. (They have already raised it twice this year.) Your answer should consider the goals of the Federal Reserve (see Chapter 16 or conduct an internet search for their goals). It should focus on an economic model (e.g., AD and AS and how it's affected by the money supply), to explain the desired outcome.   

4.      Determine whether our current economic situation can be explained by any of the theories on page 433-35 (sticky-wage theory, sticky-price theory, or misperceptions theory). You must use data.

5.      Write up an applied example of the multiplier effect (see page 464).

6.      Identify and analyze at least two of the major fiscal and/or monetary policies used to combat the 2007-09 economic recession. Explain them from the context of the AD/AS model (e.g., the intent was to increase AD) and whether they were successful. (HINT: The major part of this assignment is explaining how the specific fiscal or policy mechanism works theoretically. Writing about the impact is just background information.)

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