There are probably a thousand macro economic indicators, some measure
the overall national economy, some are more limited in scope. The three
most often quoted and publicized are the Gross Domestic Production Index
(GDP), the Consumer Price Inflation Index (CPI) and the Unemployment
Index. Below I will give you the link(s) for each one of the indicators
followed by two or more questions you are to answer. The links show you
the respective formulas and examples of the way the indicator is
calculated. In all there will be three indicators with five total links.
GDP links: http://mindtools.net/GlobCourse/formula.shtml
http://www.cliffsnotes.com/study_guide/GDP.topicArticleId-9789,articleId-9733.html
Questions: 1. Assume that consumer spending is $1,000, government
expenditures are $250, investments by industry are $200, and the excess
of exports over imports is $300. Compute the GDP. (please show your
work) 2. If we are able to increase our domestic energy production, and
that allows us to import less oil from foreign countries, briefly
explain what will happen to the GDP. Inflation links:
http://inflationdata.com/inflation/inflation_articles/calculateinflation.asp
http://www.investopedia.com/terms/i/inflation.asp#axzz1lAEXt7uC
Questions: 1. If the CPI went from 106 to 111 during the past year, the
rate of inflation, in percent, was? (please show your work) 2. If the
CPI went from 217 to 234 over the past year, the rate of inflation was?
(please show your work) Unemployment rate link:
http://www.cliffsnotes.com/study_guide/Unemployment-Rate.topicArticleId-9789,articleId-9735.html
Questions: 1. Assume the total civilian labor force is 30,000 people
and the number of unemployed is 2,500 people. Compute the unemployment
rate, in percent. (please show your work) 2. As with the above problem,
assume the total civilian labor force is 30,000 people, but, 500 of the
unemployed have now given up and have stopped looking for work. Compute
the unemployment rate, in percent. (please show your work) Yield Curve
Links: The link below takes you to a site that shows you various
Treasure security yields and how short and long-term yields differ. This
is called the term structure of interest rates and when graphed it is
called a yield curve. Access this link and the PowerPoint link below it
and then answer the questions that follow.
http://www.treasury.gov/resource-center/data-chart-center/Pages/index.aspx
For Yield Curve Powerpoint click here Questions: 1. Assume interest
rates on Treasury bonds, with the indicated time to maturities as
follows: 15 years = 7.72% 20 years = 8.72% 25 years = 9.64% 30 years =
10.18% The differences in rates among these bonds is caused by: (please
briefly explain your choice) a. Tax effects b. Maturity risk premiums c.
Default risk premiums d. A down sloping yield curve e. Liquidity risk
premiums 2. Which statement is False? (please briefly explain your
choice) a...Click here to get more on this essay.....
The market risk premium is added to all bonds, even U.S.
Government ones. b. The liquidity premium requires that an asset can be
sold both quickly and for fair market value. c. The inflation premium is
added on to the required return to protect the purchasing power of an
investors earnings. d. The default risk premium is applied to all bonds
including U.S. Government ones. 3. Over the next 3 years inflation is
expected to be: Year one 2.5%, year two 4.5%, year three 5.0%. What
should investors require for an inflation premium on a Treasury bond
with a three-year maturity? (please show your work) 4 If the rate of
inflation is expected to be 0% for the next 4 years will the yield curve
have an upward slope? (please briefly explain your answer) Examine the
most recent issue of International Economic Trends, published by the
Federal Reserve Bank of St. Louis. The figures you see in the graphs are
percent changes compared to the year before, in economic data for seven
countries and the Euro Area. Your assignment is to compare indicators
for the United States, Japan, Canada, and the United Kingdom.
International Economic Trends is found at this site:
http://research.stlouisfed You must use this site for your base
information but you are welcome to use one or more other sites to help
you in your analysis....Click here to get more on this essay.....
When you click on the link above you come to a
summary screen with several economic indicators for several different
countries. Scroll down and you will see a cross country comparison that
you can access, and this is best for the multiple country comparisons
you will be doing. When using the cross country comparison first make
sure you choose the graph that compares the US, Japan, Canada, and the
United Kingdom, because other comparisons will also be shown. Second,
make sure you choose the correct chart because several will be displayed
for each economic classification. You will need to access: Output and
growth (GDP), and this will be the first graph on your screen. Inflation
and prices (CPI), and this will be the second graph on your screen.
Labor markets (employment), and this will be the third graph as you
scroll down. For each of the three comparisons below you need to utilize
the latest available information shown in the graphs. It is extremely
important that this most recent data be included. 1. Compare the four
countries in terms of Output and Growth (Real GDP). The analysis should
only cover the period from the beginning of 2008 to the present. 2.
Compare the four countries with respect to Inflation and Prices (CPI).
The analysis should only cover the period from the beginning of 2008 to
the present. 3. Compare the four countries regarding the Labor Market
(Unemployment Rate)...Click here to get more on this essay.....
The analysis should only cover the period from the
beginning of 2008 to the present. 4. Provide a conclusion, with
supporting justification, as to which country has had the best overall
economc recovery since 2008. Optional readings The following shows you
the yields on all the maturities issued by the Treasury in the form of a
table. You can also see a graph of the current yields, the yield curve,
by clicking on the Data and Charts Center located on the left column of
the page. Be patient, it is slow to load.
http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
The following gives you a hypothetical yield curve (not based on
current data) but the value is in the explanations that are below the
curve. http://www.investopedia.com/terms/y/yieldcurve.asp#axzz1VCSWJAY8
Case assignment expectations: Use information from the modular
background readings as well as any good quality resource you can find.
Make sure you cite all resources you use and provide a reference list at
the end of your paper. LENGTH: 4-5 typed and double-spaced pages. In
addition to the overall quality, depth, grammar, and organization of the
paper, the following will, in particular, be assessed: 1. Your ability
to present comparative economic data in a clear and precise manner. 2.
Your ability to analyze comparative economic performance to arrive at
conclusions consistent with the facts.. 3. Some in-text references to
modular background readings (APA formatting not required). NOTE: To get
the background reading to to Trident University my USERNAME: lejohns
PASSWORD:fhf574 once you logon select course material un Macroeconomics
and then select module 2 background and you can also select module 2
case assignmentfor the links
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