eco/372 week 3
Money and the Prices in the Long Run and Open Economies
The organization’s strategic plan you wrote about in Week 2 calls for an aggressive growth plan, requiring investment in facilities and equipment, growth in productivity, and labor over the next five years. It is your responsibility to determine how the U.S economy during this five year period will impact such an aggressive growth plan. To do so, you should:
Develop a 2,100-word economic outlook forecast that includes the following:
- Analyze the history of changes in GDP, savings, investment, real interest rates, and unemployment and compare to forecast for the next five years.
- Discuss how government policies can influence economic growth.
- Analyze how monetary policy could influence the long-run behavior of price levels, inflation rates, costs, and other real or nominal variables.
- Describe how trade deficits or surpluses can influence the growth of productivity and GDP.
- Discuss the importance of the market for loanable funds and the market for foreign-currency exchange to the achievement of the strategic plan.
- Recommend, based on your above findings, whether the strategic plan can be achieved and provide support.