Team Assignment #1 Lessons 1 to 9 Class, you have been assigned into teams of 4 or 5. You need to…


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Team Assignment #1 Lessons 1 to 9 Class, you have been assigned into teams of 4 or 5. You need to… 1 answer below » Team Assignment #1 Lessons 1 to 9 Class, you have been assigned into teams of 4 or 5. You need to discuss amongst yourselves how the duties of the assignment will be divided and the manner in which it will be presented to me. Working together will ensure that all parts will be done well and on time. Question 1: Overview of the Macroeconomy: Interpretation (25 marks) Please discuss the current state of the macroeconomy in Canada. In particular please discuss the growth rates and gross domestic product, the unemployment rate and lastly inflation. Please discuss how these variables compare to View complete question » Team Assignment #1 Lessons 1 to 9 Class, you have been assigned into teams of 4 or 5. You need to discuss amongst yourselves how the duties of the assignment will be divided and the manner in which it will be presented to me. Working together will ensure that all parts will be done well and on time. Question 1: Overview of the Macroeconomy: Interpretation (25 marks) Please discuss the current state of the macroeconomy in Canada. In particular please discuss the growth rates and gross domestic product, the unemployment rate and lastly inflation. Please discuss how these variables compare to both the short and long run averages. In providing answers, please provide where data was obtained. You can use the internet or more authorative sources such as the Bank of Canada, Statistical Canada (Cansim) dataset or the IMF/World Bank websites. After you have ascertained this information, please make a determination as to whether the economy is at its long run equilibrium level (full employment), or whether it is in a recessionary or expansionary gap. (Hint: the economy is rarely at its long run level). Question 2: Legislative Overview (15 Marks) Please discuss 2 important institutions in Canada responsible for conducting fiscal and monetary policy, name the Department of Finance and the Bank of Canada. What are the roles of each and what are each responsible for obtaining? What are the responsibilities of each institution and what tools do they have at their disposable to impact the economy? Can you say that their objections are in tandem with one another or due they sometimes conflict? Please explain. Question 3: Mechanical Aspects of Conducting Fiscal and Monetary Policy (25 Marks) Briefly explain the tools that governments have to move the economy from either a recessionary or expansionary gap to the long run equilibrium level. Based on your diagnosis (from question 1) what are some of the fiscal or monetary policy tools available to government and the Bank of Canada can undertake to get the economy back to full employment. Please use diagrams to illustrate your answer. What are the pros and cons of fiscal and monetary policy? Based on your analysis, does conducting fiscal and monetary policy result in the same impacts on inflation or output levels? Be sure to talk about the tradeoffs (or lack thereof) that exists between inflation and output in the short and long run. Question 4: Policy (45 marks) In many instances, government spending results in the economy moving to the long run steady state at the expense of higher inflation levels. All too often, the best policy is simply to do nothing, leaving the market to adjust in order get the economy back to the long run steady state level (full employment) at the lowest price level. The problem with government doing nothing is two fold. First they do not want to be seen as not acting, especially during a recession. Secondly, the economic benefits of the government doing nothing (such as during a recessionary period) takes a long time to materialize (given prices in the economy take time to adjust), which is not popular with governments especially if there is an election. There seems to therefore be a tension between the Bank of Canada who wants to a…

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