Grantham ECN206 Complete Course Latest 2023 January (Full)

ECN206 Macroeconomics
Week 1 Discussion
Government and the Market Economy
Welcome to the Discussion Forum!
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday. By Tuesday, you should respond to two additional posts from your peers. If you have not done so lately, please review the Rules of Discussion.
The origin of economics as a science dates back to the publication of An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith in 1776. Smith believed a market economy would generally bring individual self-interest and the public interest into harmony.
Based upon those notions of self-interest and public interest and the bringing of both into harmony, according to Adam Smith, how would a market economy accomplish that harmony about which he describes? What is government’s place in that market economy?
Think about society’s need to choose amongst competing resources and goals. How does personal gain affect choices by individuals and government? Opportunity costs. While we want to do one thing, we can’t do others based upon scarcity and opportunity costs. Resources are finite. What about incentives as opposed to free offerings? What about trade?
For your follow up post…review the responses provided by your peers. Engage in conversation, or even civil debate, as you discuss their insights and viewpoints. You may ask questions for clarification (if you are confused by their initial post) or pose questions that advance the conversation. You might even find a topic that leads you to further research in the area!
ECN206 Macroeconomics
Week 2 Discussion
Market Equilibrium and Price Controls
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday. By Tuesday, you should respond to two additional posts from your peers.
Markets seek equilibrium, and the demand for goods and services will come to an equilibrium with supply of goods and services. When markets are not in equilibrium, surpluses and shortages, as well as underground markets, can exist. Sometimes, the government may want to intervene in markets to try to help reduce economic hardships.
What is the difference between a price floor and price ceiling? According to the laws of demand and supply and how market equilibrium, efficiency, and equity are reached, do attempts to repeal those laws and market results with price floors and price ceilings justify legislative bodies to implement price controls?
Review the mechanics of supply and demand. Disequilibrium between supply and demand will occur if price is above (surpluses) or below (shortages). Why does a price floor lead to surpluses? Why does a price ceiling lead to shortages? Review consumer and producer surplus. A price floor will lead to a transfer of consumer surplus to producer surplus; a price ceiling will lead to a transfer of producer surplus to consumer surplus; both price regulations lead to deadweight losses, which is a loss of surplus to society. Why?
ECN206 Macroeconomics
Week 3 Discussion
Politicians and Economic Thinking
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday. By Tuesday, you should respond to two additional posts from your peers.
Politicians have a strong incentive to follow a strategy that will enhance their chances of getting elected and re-elected. Political competition more or less forces them to focus on how their actions influence their support among voters and political contributors.
Are voters likely to be well informed on issues and the positions of candidates? Why or why not?
Review concepts like shortsightedness and rent seeking. What are the effects of government intervention in markets with some of the price regulations like price floors and price ceilings we discussed in chapter 4?
ECN206 Macroeconomics
Week 4 Discussion
GDP Deflator
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday. By Tuesday, you should respond to two additional posts from your peers.
Gross domestic product (GDP) is a measure of the market value of final goods and services produced within the borders of a country during a specific time period, usually a year.
What is the GDP deflator? How does the GDP deflator relate to real GDP?
Review GDP and nominal versus real. Real adjusts for inflation, so how do we arrive at the real GDP number from nominal GDP? Review the GDP deflator formula, where GDP deflator = (Nominal GDP/Real GDP) X 100.
ECN206 Macroeconomics
Week 5 Discussion
Short-Run and Long-Run Economics
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday. By Tuesday, you should respond to two additional posts from your peers.
It is important to distinguish between changes that are anticipated and unanticipated because the impact on the economy will differ between the two. The economy is in long-run equilibrium when the short-run aggregate supply curve, aggregate demand curve, and long-run aggregate supply curve are in equilibrium. What are the major factors causing a shift in aggregate demand (inward or outward)? What are the major factors that will affect short-run aggregate supply? Long-run aggregate supply?
Review what factors will lead to a shift in the AD, SAS, and LRAS. An increase in output due to economic growth will increase both short-run and long-run aggregate supply. Unanticipated changes in either aggregate demand or aggregate supply will disrupt long-run equilibrium and cause current output to differ from the economy’s long-run potential.
ECN206 Macroeconomics
Week 6 Discussion
Fiscal Policy
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday. By Tuesday, you should respond to two additional posts from your peers.
When the economy is in a recessionary mode, aggregate demand shifting inward is often the culprit. Deflationary pressures on prices ensue, and output falls, causing problems like higher unemployment and contraction of the economy.
When the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy? Is it better to concentrate on aggregate demand or aggregate supply? Why?
Review how and why aggregate demand and aggregate supply shift inward and outward. English economist John Maynard Keynes developed a model that provides an explanation for the high and prolonged rate of unemployment of the Great Depression. According to Keynes, what are the major sources of economic instability? Fiscal policy is spending and taxation of the executive branch of the federal government; in recessionary times, what initiatives in spending and/or taxation are going to help the economy?
ECN206 Macroeconomics
Week 7 Discussion
The Federal Reserve System
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday. By Tuesday, you should respond to two additional posts from your peers.
The Federal Reserve System was established to provide a stable monetary system for the entire economy. The Federal Reserve Bank (the Fed) has three major tools to control the money supply: 1) reserve requirements, 2) discount window for loans to member banks, and 3) open market operations.
When the economy is in a recessionary mode, what will likely be the actions by the Federal Reserve using monetary policy? Suppose the Federal Reserve purchases a $100,000 bond from John Doe, who deposits the proceeds in the Manufacturer’s National Bank; what will be the impact of this transaction on the supply of money?How do each of the Fed’s tools work? What is the fractional reserve system, and how does it work in relation to the Fed? Review the Federal Reserve System and how the Fed alters the monetary base to achieve the levels of money supply in the economy.
ECN206 Macroeconomics
Week 8 Discussion
U.S. and China Free Trade
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be 75-150 words in length, and is due on Sunday. By Tuesday, you should respond to two additional posts from your peers.
Imports increase the domestic supply and lead to lower prices for consumers. Exports reduce the domestic supply and push price upward. The net effect of international trade is an expansion in total output and higher income levels for both trading partners (law of comparative advantages).
“The United States is suffering from an excess of imports. Cheap foreign products are driving American firms out of business and leaving the U.S. economy in shambles.” Evaluate this view.
Review absolute and comparative advantages. Personal private property protection allows for greater entrepreneurial ventures, and thus an expanding economy and job growth; can import tariffs and quotas reduce the benefits of trade? Review the mechanics of import tariffs and quotas and world price.
ECN206 Macroeconomics
Week 1 Assignment
Absolute and Comparative Advantage
Use the table below to answer the questions concerning absolute and comparative advantages.
Lumber Automobiles
United States 8 8
Canada 4 2
1. Which country has an absolute advantage in producing lumber?
2. Which country has an absolute advantage in producing automobiles?
3. Which country has a comparative advantage, if any, in producing lumber?
4. Which country has a comparative advantage, if any, in producing automobiles?
5. Should the U.S. trade with Canada? If so, what should be imported and what should be exported?
6. Should Canada trade with the U.S.? If so, what should be imported and what should be exported?
ECN206 Macroeconomics
Week 2 Assignment
Demand and Supply Exercises
Directions: Fill in the boxes (QD, QS, D, S, P, Q) in the next three demand and supply exercises. Based upon the event, what can we expect to occur for the market? Use a “0” (zero) if nothing will occur for that particular variable, a “+” (plus) if an increase, or a “-“ (negative) if a reduction. QD stands for Quantity Demanded, QS for Quantity Supplied, D for Demand, S for Supply, P for Price, and Q for Quantity.
Click here for the editable version of this assignment.
Problem 1 QD QS D S P Q
Problem 2 QD QS D S P Q
Problem 3 QD QS D S P Q
ECN206 Macroeconomics
Week 3 Assignment
The Importance of Competition
After reading chapters 5 and 6 and Special Topic 5, write a 2-page paper describing the importance of competition in markets. How does a lack of competition affect prices and output? Describe what the role of government is in markets vis-a-vis firms in the market.
ECN206 Macroeconomics
Week 4 Assignment
Gross Domestic Product
Title: Grantham Copyright – Description: Grantham Copyright 2018Use the data chart to answer the questions below.
Consumption $500
Government Expenditures $200
GNP $800
Gross Private Domestic Investment $100
Imports $100
Exports $50
Questions:
1. Using the data above, GDP is equal to __________________.
2. Using the data above, Net Exports is equal to _____________.
3. Using the data above, PCE (Personal Consumption Expenditure) is equal to _____________.
4. If the dollar amounts of the items above are the nominal amounts in year 2017, and the quantities of units are identical in years 2010 and 2017, but prices in 2010 were 20% less than 2017, Real GDP in 2017 using 2010 as the base year is equal to _______________.
ECN206 Macroeconomics
Week 5 Assignment
Economic Cycle Curves
Construct the AD, SRAS, and LRAS curves for an economy experiencing (a) full employment, (b) an economic boom, and (c) a recession. What will happen in each case if it’s only temporary? What will happen in each case if it’s permanent?
ECN206 Macroeconomics
Week 6 Assignment
The Importance of Competition
After reading chapters 11, 12, and Special Topic 4, write a 2-page paper describing the economic viewpoints and theories of John Maynard Keynes. What were his views of the causes recessions and solutions to fixing them? In his view, what place did government have to improve markets? What does the concept of “crowding out” mean in all of this?
ECN206 Macroeconomics
Week 7 Assignment
Federal Reserve & Open Market Operations
If the Fed shifts to a more restrictive monetary policy, and it utilizes the open market operations tool, describe what will happen to each of the following:
1. the reserves available to banks
2. real interest rates
3. household spending on consumer durables
4. the exchange rate value of the dollar
5. net exports
6. the prices of stocks
7. real GDP
ECN206 Macroeconomics
Week 8 Assignment
Effects of Free Trade and Restrictions
Use the graph below to answer the following questions:
https://content.grantham.edu/academics/GU_ECN206/W8Assignment_files/image002.png
The graph above shows the demand and supply of wrenches for the country of Spain.
1. If trade is avoided, Spain consumes _____ wrenches at a price of _____ per wrench.
2. With free trade, for a world price of $4 per wrench, Spain is producing _____wrenches.
3. With free trade, for a world price of $4 per wrench, Spain is consuming _______ wrenches.
4. With free trade, for a world price of $4 per wrench, Spain is importing _________wrenches.
5. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, Spain produces ____________ and imports __________wrenches.
6. If the world price is $4 per wrench, and the government of Spain imposes a tariff of $2, how much tariff revenue will the Spain’s government collect? _____

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