02 Jun Question Macroeconomic Analysis paper
Question
Macroeconomic Analysis paper
Scenario:
After hearing of your taking this course in business economics, Uncle Dan has e-mailed you asking for advice on his 100-acre corn farm. He mentioned how, after 30 years of growing corn, he wishes to leave that commodity’s market and enter a more profitable market instead. He is thinking of subdividing his land and building homes and shops. He reckons he could make a good profit by selling the homes and renting the shops.
Before you can find time to answer Uncle Dan’s e-mail, you read the piece “Will the Fed’s New Policies Revitalize the Housing Market?” on page 896 of the textbook. Recognizing the costs and risks for Uncle Dan in making the switch, you decide to research the economy in terms of GDP growth rate, interest rates, level of unemployment, the business cycle, fiscal policy, monetary policy, international trade, and demographics. You decide to educate yourself about macroeconomics so that you can provide Uncle Dan with the most informed advice possible.
Requirements:
Macroeconomic areas you are to address, with sources, in your answer. Briefly you are to research and show how these apply to your scenario: GDP growth rate (20 points), the business cycle (30 points), fiscal policy and level of unemployment (50 points), monetary policy and interest rates (50 points), international trade (40 points), and demographics (20 points).
Macroeconomic Paper as a Professional Report
Your paper should be organized into five parts as listed below.
1. Title Page: Name, class, and date
2. Introduction to situation but do NOT copy the scenario. Briefly summarize the situation and identify the macroeconomic issue(s) to be decided from the perspective of the organization.
3. Business Cycles, Unemployment, Inflation, International – Comparative Advantage, Exchange Rates, Trade, Etc., Monetary Policy and Interest Rates, and Fiscal Policy and Unemployment Identify the variables that are critical in addressing the issue(s). Gather and present the relevant data on the variables by searching the DeVry Online Library. Ask a librarian for help if needed. Use in-text citation to report the source(s) of the data. Graphs may be included here.
4. Recommendations and Economic Justification
Formulate and present your recommendations for addressing the issue(s) based on the relevant data and economic principles identified above. Justify your recommendations in terms of the economic impact on those affected.
5. References
List the full references for at least five sources alphabetically in APA format.
Will the Fed’s New Policies Revitalize the Housing Market?” article
AN INSIDE LOOK AT POLICY Fed Attempts to Stimulate Housing Market… Again
ATLANTIC
Will the Fed’s New Policies Revitalize the Housing Market?
Congress is gridlocked, consumers are pessimistic, and firms are barely hiring. To speed this recovery up—or to prevent a double dip—it might be up to the Federal Reserve. Last week it announced its latest attempt to revitalize the economy. Its chief target appears to be the still anemic housing market. Will the new policies work?
The Fed’s Plan
a The central bank will take two different actions meant to jumpstart the economy. First, there’s “Operation Twist.” The Fed will attempt to push down long-term interest rates by purchasing $400 billion in Treasury securities with six to 30 year terms. The program will last for nine months—through June 2012.
But here’s the clever part: the Fed will sell shorter-dated Treasuries in exchange for bank reserves. This will prevent the Fed from having to expand its balance sheet to purchase longer-term Treasury securities. The relative increase in short term rates should be small, since short-term Treasuries are in high demand….
The Fed announced another policy change as well. It has been reinvesting its maturing principal in additional Treasury securities. The central bank will refine that approach by investing maturing principal from its agency bonds and mortgage-backed securities in additional agency mortgage-backed securities. In this way, it will keep the size of its mortgage securities exposure level. But more importantly, this action will also increase the demand for mortgage-backed securities, which should push down mortgage interest rates.
The Medicine the Housing Market Needs?
In fact, the major target for all of the Fed’s new action appears to be the U.S. housing market. Both Operation Twist and the new MBS reinvestment policy should help to push down mortgage interest rates. And they’re low already: this week Freddie Mac reports the average 30-year mortgage interest rate at just 4.09%. Through the Fed’s new policy, rates should easily dip below 4%.
Operation Twist could also help the reinvestment policy to have a more dramatic effect: as mortgage interest rates begin to decline, we should see mortgage refinancing soar. That means more maturing principal, which will provide even more capital for the Fed to reinvest in MBS to push down mortgage interest rates even further….
But Will It Boost the Economy?
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.