MONETARY POLICY IMPACTS
Weekly Learning Outcomes
This week students will
- Interpret macroeconomic forecasts to better understand the future economy and aid in decision making.
- Analyze how monetary policy affects output, growth, and the general level of prices.
- Assess global income levels and growth rates across countries to gain a global perspective of what
policy makers can do to create an environment conducive to growth and prosperity.
This week you will dive deeper into the impacts of monetary policies—specifically, their long-term impact (as opposed to their short-term impact). You will focus on the controversy among economists concerning what policies create stability. You will learn how economists forecast the economy and which tools and indexes are used. You will then explore how these forecasts might impact business decisions. Additionally, this week you will take these concepts further to not only study stability, but also growth and the use of monetary policies. You will gain perspective by taking a global view of income levels and growth rates of different countries through ranking them. Lastly, you will see how the political environment often conflicts with the adoption of sound economic policy. Even democratic politics will sometimes lead to the adoption of policies that reduce growth and prosperity.
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018). Macroeconomics: Private and public
choice (16th ed.). Retrieved from https://www.cengage.com
• Chapter 14: Modern Macroeconomics and Monetary Policy
• Chapter 15: Macroeconomic Policy, Economic Stability, and the Federal Debt
• Chapter 16: Creating an Environment for Growth and Prosperity
• Chapter 17: Institutions, Policies, and Cross-Country Differences in Income and Growth
Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach
you about economics. Retrieved from https://www.redshelf.com
• In these chapters, Tamny provides his perspective on stabilizing the economy and using
savings rates as a potential forecasting indicator. He discusses economic growth and
regulations that tie to Chapter 16 of Macroeconomics: Private and Public Choice. These
chapters provide further insight and may assist you with your Applying Monetary Concepts
(MindTap) assignment this week.
o Chapter 8: Savers Are an Economy’s Most Valuable Benefactors
o Chapter 11: Appalachian State Almost Never Beats Michigan, and Government
Regulation Almost Never Works
Bloom, D. E. (2016, March). Demographic upheaval: The world will struggle with population growth, aging, migration, and urbanization. Finance & Development, 53, 6–11. Retrieved from https://www.imf.org/ • The full-text version of this article is available through the EBSCOhost database in the University of Arizona Global Campus Library. This article discusses world population and the change in demographics. Although it does not go into economic policies, the article does provide an understanding of the changes in the global population. This will give a better perspective and may assist you with your Global Perspective on Income and Growth (Reflection) discussion forum this week.
Kitchings, A. (2018, August 22). A closer look at the conference board leading economic index [Blog post]. Retrieved from https://blog.commonwealth.com/independent-market-observer/a-closer-look-at-theconference-board-leading-economic-index • This article discusses leading economic indicators and ways economists forecast the economy. The article briefly discusses the lags in these measurements as well. The article may assist you with you Forecasting the Economy to Make Decisions (Role-Play) discussion forum this week. Accessibility Statement does not exist. Privacy Policy.
Wallison, P. J., & Nabil, R. (2018, Summer). Why expert economic forecasts are often wrong: Analysts ignore the regulatory issue. The International Economy, 50–51. Retrieved from http://www.internationaleconomy.com/ • The full-text version of this article is available through the EBSCOhost database in the University of Arizona Global Campus Library. This article gives a critical review of economic forecasts. The article discusses the models and indicators used and if they are accurate. The article contrasts your textbook and thus provides another perspective to evaluate. The article may assist you with your Forecasting the Economy to Make Decisions discussion this week.
Charles Schwab. (2018, June 15). What is the leading economic index (LEI)? [Video file]. Retrieved from
https://youtu.be/1yfBUQEZYB4
• This video by Liz Ann Sonders, senior vice-president and chief investment strategist at Charles
Schwab, explains the leading economic index (LEI). She clearly explains why she uses these
particular indicators. This is an excellent, short video to explain the real-world use of the LEI and
may assist you with your Forecasting the Economy to Make Decisions discussion forum this
week. This video has closed captioning and a transcript.
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MRUniversity (n.d.). Basic facts of wealth [Video file]. Retrieved from
https://www.mruniversity.com/courses/principles-economics-macroeconomics/gdp-per-capitapurchasing-power-parity-example
• This video by Marginal Revolution University discusses the basic facts of wealth and makes
comparisons between Central African Republic, Mexico, and the United States. The video
shows purchasing power and provides a better basis to assist you with your Global Perspective
on Income and Growth (Reflection) discussion forum this week. This video has closed
captioning and a transcript.
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Forecasting the Economy to Make Decisions (Role-Play) [WLOs: 1, 2] [CLOs: 1, 2]. 1st Post Due
by Day 3. Prior to beginning work on this discussion,
• Read Chapter 15 of Macroeconomics: Private and Public Choice.
What helps economists forecast the economy? Imagine you are presenting the index of the leading
indicators concept to a small group of newly hired analysts. In a minimum of 200 words,
• Discuss the index of the leading indicators.
• Is the Phillips curve a helpful predictor? Why or why not?
• As a business person, how could you use this predictive macroeconomic information to help
make business decisions? (Give specific examples.)
Again, your initial response should be a minimum of 200 words. Graduate school students learn to assess the perspectives of several scholars. Support your response with at least two scholarly and/or credible resources in addition to the text.
Global Perspective on Income and Growth (Reflection) [WLO: 3] [CLOs: 1, 2, 3, 5]. 1st Post Due by Day 3. Prior to beginning work on this discussion, • Read Chapter 17 of Macroeconomics: Private and Public Choice. From the tables presented in Chapter 17, what did you find most striking or unusual in the given income levels and growth rates of the different countries? Are rich countries getting richer while the poor are getting poorer? Has the United States become more or less economically free and how might this impact the future growth of the US? How does political decision-making impact the economy? Your initial response should be a minimum of 200 words. Graduate school students learn to assess the perspectives of several scholars. Support your response with at least two scholarly and/or credible resources in addition to the text.
Applying Monetary Concepts (MindTap) [WLOs: 1, 2] [CLOs: 1, 2, 3, 5]. Due by Day 7. Prior to beginning work on this assignment, • Read Chapters 14 and 16 of Macroeconomics: Private and Public Choice. • Review Chapter 15 of Macroeconomics: Private and Public Choice. Complete the homework for Chapters 14 through16 in MindTap. The homework consists of a total 30 multiple-choice questions (10 from each chapter). These questions will apply the monetary concepts of stability and growth. Your score on this exercise will automatically send to your Canvas gradebook.
