12/5/2020
Extra Credit: Case Study
Extra Credit: Case Study
Due Sunday by 11:59pm
Points 0
Submitting an external tool
You will be given a hypothetical economic situation and are tasked with applying your economic
prowess to fix the economy. Your response should be 1½ – 2 pages (400-600 words). There are a
multitude of “correct” answers and you should provide a unique description and explanation for
your answer. This type of assessment helps you demonstrate your own knowledge while also
helping to prevent and detect plagiarism. You do not necessarily need to use all of the information
in the scenario to successfully answer the questions. Read the full scenario and all questions
before you begin your response.
If you have any questions about how to complete this assignment please contact me through the
Canvas Inbox!
Situation A:
The country of Argonia has experienced an expansionary period with rapid growth for the past 10
years leading to their rGDP doubling during this time. Recently there was a large earthquake that
ended this phase and threw the country into a severe recession. Currently the rGDP has dropped
by $10 million below the full employment level. The average inflation rate is 3%, the money
multiplier is 4, the natural rate of unemployment is 6%, the current unemployment rate is 35%, and
the government debt is 200% of rGDP.
1. Choose to act as either the Federal Reserve Bank or the Federal government and explain your
choice.
2. Explain what actions you would take to fix the economy. (Be as specific as possible – including
timeline, actual policy choices and calculations if applicable).
3. Explain how effective you expect your policy choices to be. What are the limitations of your
agency’s impact on the economy?
Submission Instructions
1. Save your document with your last and first name and assignment title (i.e.
JohannsenRebecca_CaseStudy).
https://canvas.pasadena.edu/courses/1107469/assignments/8621869
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12/5/2020
Extra Credit: Case Study
2. Submit through Canvas. There is a link in module 7 at the end of the assignment description.
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