Economics Assignment: Policy Recommendations and Deficit Causes

Policy recommendations for high unemployment and deficits

1. We are advisors to the president. The nation is experiencing the following:

a.It has a high unemployment which stems from an insufficient use of resources.

b.It faces a current account deficit.

c.It has a capital account surplus.

d.The technology level is low         

e.The infrastructure level is low.

What policy recommendations would we offer to cure the aforementioned maladies?

Note, these policy recommendations should be complementary to one another, or if there is some contradiction, we should advise a sufficient number to address all of them.

2.  Explicate deficits caused by un-competitiveness.

3. Discuss ways to use to support one’s currency if there is a financial/capital account deficit.  What problems are there? What are the implications for monetary policy and freedom of capital movements? This, professor Kallianiotis calls the trilemma/impossible trinity and explains it. In other words, talk on freedom of capital movements, monetary policy and fixed exchange rates.

4. Compare and contrast cyclical versus secular absorption

5. If our deficit is caused by un-competitiveness, what policies should we pursue?

6. How would you address financial/capital account deficits? Evaluate the pros and cons of such policies.

7. The US was the biggest creditor nation 40 years ago. It has now become the biggest debtor country approaching a debt level of $ 8 trillion. Explain.

8. Analyze appropriate policies to combat a cyclical over absorption

9. Explicate the pros and cons of the World bank and the IMF. As muc as possible, attempt to treat them as one.

10. What are the policies to use to correct the cyclical absorption causes of deficits? Evaluate them.

11. Talk on 4 reasons governments intervene in free trade, historically.

12. Joseph Stieglitz, Nobel Laureate in Economics, has argued that the US should pay for higher education from the general tax coffers. Thus, he proposes a free for citizens higher education that will cost $300 billion. Given the unemployment rate of 9 %, huge CA deficits, competitiveness that is slipping and increasing debt levels for the government, comment on his recommendation. 

13. Elucidate structural deficit reasons. 

14. Expound on the imposition of a tariff. Ascertain that you include any effects on production and consumption. Is the tariff good for the nation imposing it? If so, why is it beneficial? Is it damaging to the nation imposing it? Why and how? 

15. Discuss the advantages and disadvantages of the price system.

16. Elaborate on the advantages and disadvantages of government intervention.

17. Explain the criterion the government should use in order to intervene in free trade. Give examples either for the rest of the world or the US. 

18. Analyze the gold exchange system.

19. Elaborate on the policies to improve a secular current account deficit.

20. Talk on the policies to improve an un-competitiveness deficit.

21.  Compare and contrast the efficiency, fundamental and technical Views of exchange rate determination. Give numeric examples.

22. If a nation faces high (above one in absolute value) price elasticities of demand for exports and imports what should it do to the exchange rate? If , on the other hand, the nation faces low elasticities of exports and imports (their sum being less than the absolute value of one) how should it influence its exchange rate?

23. Elucidate the functions of the IMF.

24. Compare and contrast the periods of time between the two World Wars and the period before that.

25. Compare and contrast the IMF and the World Bank group in raising money for themselves.

26 Describe the 5 institutions which make up the World Bank group.