29 Dec Money and Banking

ECO312 Week 1 Discussion 1 & 2 latest 2017 march

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Opportunity Cost (graded)

What is opportunity cost, and how is it different from accounting cost? Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent decision you made. It could be a decision as simple as whether to eat out or cook at home. Or, it could be a decision to quit your job and go back to school. What alternatives did you consider? How did you arrive at your final decision? Did you implicitly weigh marginal cost and marginal benefit? How does the concept of opportunity cost apply to production possibilities curve (PPC) analysis? How can we use PPC analysis to examine the opportunity cost of what we do?

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Economic systems (graded)

What are economic resources, and how does scarcity of resources apply to economic decisions? Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster, Barnes & Noble, McDonald’s, etc.). What motivated the producers of each of the products in the store to make these and offer for sale? How did the producers decide on the best combination of resources to use for producing each product? Who made those resources available, and why? How does the market determine who will get the goods and services? Who decides whether these particular products should continue to be produced and offered for sale? How do these decisions differ between capitalist and socialist systems?

ECO312 Week 2 Discussion 1 & 2 latest 2017 march

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Demand, Supply, and Market Equilibrium (graded)

Think of a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk, shoes, manicure/pedicure, video game, etc…). Explain how the law of demand affected your purchase. Give specific examples of how the determinants of demand and supply affect this product (T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve when any of these determinants change? What would cause a change in demand versus a movement along the same demand curve for this product? How would you determine the new equilibrium price and quantity that result from these changes? Can you demonstrate some of these changes graphically?

dq 2

Price Elasticity of Demand (graded)

Consider a product that you have purchased recently. If the price of this item increases, how would you adjust your purchases? Is the Demand for this product Price Elastic or Price Inelastic? Justify your classification by applying the determinants of elasticity to this product. Suppose price of this product is on the rise and you are the store manager. Would you be thrilled to be selling this product? How does an increase in price for this product affect your Total Revenue? Using specific examples, relate the concepts of Cross Elasticity and Income Elasticity to this product.

ECO312 Week 3 Discussion 1 & 2 latest 2017 march

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Concepts of Cost (graded)

What are the differences between economic and accounting concepts of cost? How would you manage the costs associated with a value-creation activity? How do costs of operations relate to the strategy of the organization?

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Prices Under Different Market Structures (graded)

How are prices determined under perfect competition? Think about a firm that you have done business with recently. To what industry does this firm belong? For example, McDonald’s is a firm in the fast food industry. What market structure would this industry fall under? What are the names of other firms in this industry? Is it monopolistic competition, oligopoly, monopoly, or perfect competition? How does market structure affect the firm’s ability to set the price for its products?

ECO312 Week 4 Discussion 1 & 2 latest 2017 march

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Free Trade (graded)

Are you for or against free trade? Are you for or against NAFTA? What is the economic basis for trade? Explain the underlying facts that support free trade and give an example of a good that you purchased recently that is based on resource differences. What are some examples of goods that the United States has comparative advantage in producing? Take a look at the tag of the shirt/dress/pants that you are wearing today. Where was it made? Anyone wearing Made in U.S.A. items of clothing today? We sometimes hear people say Buy American. Why don’t we? What is the basis of international trade? What are the benefits and the costs? Under what conditions would you advocate for trade restrictions?

dq 2

Foreign Exchange (graded)

What is happening to the value of the U.S. dollar these days? What causes the value of the U.S. dollar to rise or fall? Who demands the U.S. dollar? Who supplies the U.S. dollar? When we purchase German products, does our demand for euro go up or down? What are freely floating exchange rates all about, and how do they work? How can the falling U.S. dollar impact your travel expenses? Why would a cheap dollar relative to other nations’ currencies be good or bad for U.S. trade?

ECO312 Week 5 Discussion 1 & 2 latest 2017 march

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GDP, Aggregate Demand, and Aggregate Supply (graded)

Go to the BEA website (http://www.bea.gov). On the left tab under Resources, go to the Interactive Data. Select GDP & Personal Income. Under Section 1, see Tables 1.1.6 and 1.1.7. Examine all four components of GDP (C, I, G, and Xn). Which of these four components of AD are rising and which are dropping? On the top righthand corner of the page, you can click on Modify to select prior years.

dq 2

Business Cycles? (graded)

See the latest Beige Book of the Federal Reserve at this link: http://www.federalreserve.gov/monetarypolicy/beigebook/default.htm. Read the Summary section. Based on the information provided, the U.S. economy is currently in which phase of the Business Cycle? Why?

ECO312 Week 6 Discussion 1 & 2 latest 2017 march

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Unemployment (graded)

Go to the Bureau of Labor Statistics website (www.bls.gov/news.release/empsit.toc.htm), and click on Employment Situation Summary for the most up-to-date summary of unemployment in the United States, or the Employment Situation Summary Table A. Household data, seasonally adjusted. What interests or surprises you about the summary tables? How do the current rates compare with the rates in the previous month or quarter? Discussthe differences in unemployment rates by gender, age, education, and so forth.

dq 2

Inflation (graded)

What factors are considered in calculation of the CPI? Explain your answer. Where would you find data on CPI and PPI for the United States? What does the current level of inflation tell you about the state of the U.S. economy?

ECO312 Week 7 Discussion 1 & 2 latest 2017 march

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Money and Banking System (graded)

You use money just about every day. What is money and what functions does it perform? How is the supply of money measured? Who influences how much liquidity is created or reduced in the U.S. economy?

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Fiscal Policy and Monetary Policy (graded)

What would happen if no one tried to manage the business cycle? What role do you see for the Executive Branch of the U.S. government in managing the business cycle? How does fiscal policy work? What are its limitations? How does monetary policy work? Who is responsible for setting and implementing monetary policy?