Money and the Prices in the Long Run and Open Economies

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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.

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Explanation & Answer

1

Running Head: FINANCIAL MARKETS

Financial markets
Institutional affiliation
Date

FINANCIAL MARKETS
Money and the Prices in the Long Run and Open Economies
Analyze the history of changes in GDP, savings, investment, real interest rates, and
unemployment and compare to forecast for the next five years.

Issues of economics concern have been the talk and the main considerations in many companies.
Governments and residents have been striving to improve their productivity in the respective
fields of their work. Any form of work in the nation including the performance of the
government is responsible for the growth of the economy in the nation. All the works in the area
irrespective of the participants and the factors determining the movements are responsible for the
improvements or decline in the GDP. However, the government plays an important role in the
gearing of the system towards the realization of the set objectives in regard to the GDP. All the
principles of working in the nation are to be implemented in the working processes of the people
on order to improve their productivity in the country. Any contribution of any given citizen is
vital as it accounts in the GDP of the whole country. The system of market and trade policies as
set by the government together with the local governments is the key factor of consider towards
the gearing of the people’s productivity. Any policy made in favor of the people’s performance is
essential in the process of making changes and evaluations in the flow of the investment attempts
among the people. (Pagano, 1993)

The pattern and mode of saving in any given community greatly serves the economic
development and movements of the people. There are many forms and ways of saving in
different communities. Some still have been using the ancient outdated ways of saving with
others making attempts to adopt the modern currently introduced modes of saving in their
locality. Many people have been suffering the absence of an efficient saving system in their

2

FINANCIAL MARKETS
locality which greatly assists them in the process of making good money plans. Money plans
assists people in the process of making good evaluations in regard to their money. Money at
hand becomes much challenging to handle. Impulse attempts may arise in and lead the poor
usage of resources. However, a good saving plan and system is essential for the realization of
proper budgeting. A saving system must be secure enough to keep the resources of the people
well cared. No loses should be realized in a given saving system otherwise the system would be
considered as being inappropriate for the saving of people’s resources. Some systems may
charge some free for the service of saving people’s resources. With the dev...


Anonymous
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