COURSE CODE BCO124 COURSE NAME MACROECONOMICS Task brief & rubrics
Task: Individual assignment
- Exercises have to be explained and calculations shown.
- Consider an economy that produces only pens. In year 1, the quantity produced is 4 bars and the price is 5 €. In year 2, the quantity produced is 5 bars and the price is 6. In year 3, the quantity produced is 6 bars and the price is 7. Year 1 is the base year.
- What is nominal GDP for each of these three years?
- What is real GDP for each of these years?
- What is the GDP deflator for each of these years?
- What is the percentage growth rate of real GDP from year 2 to year 3?
- What is the inflation rate as measured by the GDP deflator from year 2 to year 3?
- Suppose that people consume only three goods, as shown in this table:
Raquets Nets bottle of water
2019 price 3 € 5 € 2 €
2019 quantity 200 200 300
2020 price 3 7 3
2020 quantity 200 200 300
- What is the percentage change in the price of each of the three goods?
- Using a method similar to the CPI, compute the percentage change in the overall price level.
- If you were to learn that a bottle of water increased in size from 2019 to 2020, should that information affect your calculation of the inflation rate? If so, how?
- Read the following text:
Many studies have examined the effect of unemployment insurance on job search. The most persuasive studies use data on the experiences of unemployed
individuals rather than economy-wide rates of unemployment. Individual data often yield sharp results that are open to few alternative explanations.
One study followed the experience of individual workers as they used up their eligibility for unemployment-insurance benefi ts. It found that when unemployed
workers become ineligible for benefi ts, they are more likely to fi nd jobs. In particular, the probability of a person fi nding a job more than doubles when his
or her benefi ts run out. One possible explanation is that an absence of benefi ts increases the search effort of unemployed workers. Another possibility is that
workers without benefi ts are more likely to accept job offers that would otherwise be declined because of low wages or poor working conditions.
Additional evidence on how economic incentives affect job search comes from an experiment that the state of Illinois ran in 1985. Randomly selected new claimants for unemployment insurance were each offered a $500 bonus if they found employment within 11 weeks. The subsequent experience of this group was compared to that of a control group not offered the incentive. The average duration of unemployment for the group offered the $500 bonus was 17.0 weeks, compared to18.3 weeks for the control group. Thus, the prospect of earning the bonus reduced the average spell of unemployment by 7 percent, suggesting that more effort was devoted to job search. This experiment shows clearly that the incentives provided by the unemployment-insurance system affect the rate of job finding.
- Give the main ideas in bullet points. (min =6)
- Give your point of view of each one supported with economic terms /principles.
- Suppose one economy decides to reduce investment and increase consumption.
- How this changes affect economic growth?
- What groups in society would benefit from this change? What groups might be hurt?
Formalities:
- Wordcount: < 1000
- Font: Arial 12 pts.
- Text alignment: Justified.
- The in-text References and the Bibliography have to be in Harvard’s citation style.
- This assignment is 40 % of total grade
It assesses the following learning outcomes:
- Outcome 1: Understand forces determining macroeconomic variables such as GDP, unemployment, inflation
- Outcome 2: Apply macroeconomic terminology and assess macroeconomic policy suggestions
Rubrics
| Exceptional 90-100 | Good 80-89 | Fair 70-79 | Marginal fail 60-69 | |
| Knowledge & Understanding (20%) | Student demonstrates excellent understanding of key concepts and uses vocabulary in an entirely appropriate manner. | Student demonstrates good understanding of the task and mentions some relevant concepts and demonstrates use of the relevant vocabulary. | Student understands the task and provides minimum theory and/or some use of vocabulary. | Student understands the task and attempts to answer the question but does not mention key concepts or uses minimum amount of relevant vocabulary. |
| Application (30%) | Student applies fully relevant knowledge from the topics delivered in class. | Student applies mostly relevant knowledge from the topics delivered in class. | Student applies some relevant knowledge from the topics delivered in class. Misunderstanding may be evident. | Student applies little relevant knowledge from the topics delivered in class. Misunderstands are evident. |
| Critical Thinking (30%) | Student critically assesses in excellent ways, drawing outstanding conclusions from relevant authors. | Student critically assesses in good ways, drawing conclusions from relevant authors and references. | Student provides some insights but stays on the surface of the topic. References may not be relevant. | Student makes little or none critical thinking insights, does not quote appropriate authors, and does not provide valid sources. |
| Communication (20%) | Student communicates their ideas extremely clearly and concisely, respecting word count, grammar and spellcheck | Student communicates their ideas clearly and concisely, respecting word count, grammar and spellcheck | Student communicates their ideas with some clarity and concision. It may be slightly over or under the wordcount limit. Some misspelling errors may be evident. | Student communicates their ideas in a somewhat unclear and unconcise way. Does not reach or does exceed wordcount excessively and misspelling errors are evident. |
