Name:_Steve Schierholz_____________________________________ Section: ____________

E-Portfolio Signature Assignment

Salt Lake Community College
Macroeconomics - Econ 2020
Professor: Heather A Schumacker

Please type your answers to the following questions in the text boxes. If you need to hand draw the graphs on page 3 you may and
then scan them as a separate document. When you have completed this assignment post it to your e-portfolio, make sure to include all
pieces including your reflection statement. Link your ePortfolio URL to your My.slcc.edu under the Academics and Records tab
(scroll almost to the bottom and it is on the right side of the page) so that instructors can view your work. (5pts)

1. What are the 3 main macroeconomic goals economists would like to see for an economy: (3pts)

1. Low Unemployment

2. Low inflation

3. Economic growth

2. What is the formula for GDP (write out the full name)? Circle or highlight the largest component and fill in the chart. Under each
put the components and something unique. (19pts)

Consumption Investments Government Exports/Imports

GDP = + + +

Components: Consumption Components: Investments Components: Government Components: Exports/Imports

Circle the largest sub-category
1. Services 1. Business Fixed Investments 1. Goods 1. Exports

2. Durable Goods 2. Construction Industry 2. Services 2. Imports

3. Non-Durable Goods 3. Inventory

Excludes: Excludes:

1. Stocks and Bonds 1. Transfer payments

2. Interest paid on debt

3. What is the problem associated with being at AD2 that makes policy makers concerned? (1pt)

Inflation; Price level goes up and

policy makers will be concerned

Q1 Q Full Q2 REAL OUTPUT (quantity per year)

Employment
4. Who does fiscal and monetary policy? What are 2 fiscal policies and 3 monetary policies to correct a situation where the economy
is naturally at AD* but finds itself at AD2, as seen in the graph on the previous page. Briefly explain how each of these policies
would work to correct the situation. (22pts)
Who does fiscal policy: The government

1. Taxes

Taxes influence the economy and what the government will do in regard to spending. It will tell the
government how much they must spend and in what areas and this will also show how much each of us
have to spend. The government could also raise taxes which would in turn remove money from the
economy which could reduce inflation.

2. Spending

This includes purchases of goods and services within the economy. The government could reduce
spending which would then remove excess funds and would reduce the risk of inflation.

Who does monetary policy: Federal Reserve

1.
Discount Rate

This is the rate that the federal reserve charges commercial banks when they borrow funds. Reserves do
not earn interest, so banks are quick to keep at the minimum federal level. An increase in the discount
rate will cause reserves to retract which can also help with inflation.

2. Open Market Operations

Buying and selling bonds. This is the primary tool to affect the supply of bank reserves and supply of
money. The Federal reservice will sell bonds which will cause the money supply to decrease and can
fix inflation.

3. Reserve Requirement

This is the min amount of reserves a bank must have. This ratio is rarely changed since it could weaken
the banks lending and its profit. If they were to raise the requirement then banks would need to hold
more which would mean that they are not willing to lend as much. This could cause inflation to
decrease.
5. Begin in equilibrium in each of the following graphs; draw the effects from question 2 above as they would apply in each graph
below. Next draw the effects of an anti-inflationary policy taken by the fed to correct the result from question 2 - use both graphs.
Explain what is happening in each graph and overall in the economy as the due to the anti-inflationary policy. (20 pts)

Explanation:

The feds would take steps to avoid inflation. An increase in aggregate demand would cause the line to shift outward
which would then cause the output to expand over the short run. After some time, the aggregate supply would shift
because of increased taxes or the increase of the reserve requirements for banks. The reason that this would happen is
so that the output returns to equilibrium.
6. Given the situation our economy has been in the past several years, why have fiscal and monetary policy had a difficult time
getting us back to the optimal level of GDP. (5pts)
The interest rates cannot be lowered anymore, and we are unwilling to pay more taxes. Stagflation also occurs which
is high inflation with high unemployment and stagnant demand in a countrys economy. We, as a country, also keep
borrowing more then we have so we are hitting the debt limit.
7. FRED: Follow the instructions for this assignment on PDF handout.

Before you start, make sure to log in to your free account so that you can save your graphs!

FRED unemployment graph:

Watch the video Introduction to FRED and complete your own unemployment graph. Instead of using St. Louis use Salt

Lake City. Have the graph span the last 10 years. Write about what inferences you can make from this graph. Save and paste

the graph here: (5pts for the graph and 5 pts for write-up)

Write-up:

Looking at this graph you can quickly see that Salt Lake Citys unemployment rate is lower than the

nations. You can also tell that from the middle of 2009 the unemployment rate has decreased for both SLC and the

nation, while SLC continues to experience a lower percentage. From 2008-2009, there was a recession which

caused the unemployment rate to rise. In SLC, the unemployment rate raised at a higher rate quicker then the nation

but still stayed under the nations rate.

8. List the 3 types of Unemployment, define each, and highlight the names of those that are included in the natural rate of

unemployment teal. (8pts)

1.
Frictional Unemployment

The unemployment which exists in any economy due to people being in the process of moving from
one job to another.

2. Structural Unemployment

Unemployment resulting from industrial reorganization, typically due to technological change, rather
than fluctuations in supply or demand.

3. Cyclical Unemployment

Overall unemployment that relates to the cyclical trends in growth and production that occur within the
business cycle.

9. What is the difference between nominal and real, why is each important? (4pts)

The difference between these two is that nominal includes inflation and real is adjusted for inflation.
10. FRED Create a GDP graph following the instructions on the handout:

Based on the graph, what is the Real Personal Consumption Expenditures for the second quarter of 2017?

11852.958

Based on the graph, what is the Real Government Consumption Expenditures and Gross Investment amount for the second

quarter of 2017?

2895.230

Based on the graph, what is the Real Gross Private Domestic Investment amount for the second quarter of 2017?

2924.674

Based on the graph, what is the real net exports of goods and services amount for the second quarter of 2017? (4pts)

-613.633

11. Write about what inferences you can make from this graph. Save and paste the area graph here: (5pts for the graph and 5 pts

for write-up)

Write-up:

By looking at this graph and the numbers you can see that the real exports/imports of goods and services is negative and that is
because imports are much higher than exports. You can also see that real consumption expenditures continues to rise which tells
us that we continue to spend more, and this is this largest category.
Change the graph type to a pie graph:

Put the curser over the pie graph: What is the value of the current Real Personal Consumption Expenditures 67%

in billions of chained 2016 dollars and what % of GDP is it 11921.136

5
What is the value of the current Real Government Consumption Expenditures and Gross Investment 16.3% in

billions of chained 2016 dollars and what % of GDP is it 2897.990

What is the value of the current Real Gross Private Domestic Investment Expenditures 16.7% in billions of

chained 2016 dollars and what % of GDP is it 2976.985 (6pts)

Paste the pie graph here: (3 pts)

12. Use the excel sheets provided to complete this problem. Scenario 1: If the initial deposit into a bank is $5,000 and the
reserve requirement is 10% use formulas to fill in the chart all the way to completion (where there will be 0 for new
deposits). Use formulas and cell references whenever possible. Fix the cell references for the reserve requirement when
entering your formulas on the first line such that you can drag your information down the rows. Fixing a cell reference is
done by putting dollar signs in front of the cell row and column references ex. $B$3 this will mean that no matter where
you copy that cell to it will always refer to cell B3. For scenario 2, change the reserve requirement to 40%. (20)

13. Article:
The purpose of this article assignment is that it requires practical application to real world issues and written
communication skills are worked on.
Students will be expected to find an article (they can be from the internet, magazines, newspapers, etc.) that relates to
different economic topics that have been discussed in class that you can attach to a word document (make sure if it is
coming from the internet to include the URL). The article needs to be accompanied by a typed assessment that will: 1)
present a brief summary of the article (no more than 5 typed lines) and 2) explain how the article relates to a minimum of
20 specific economic concept that were covered in this class. For each unique term highlight the key term and put it in
bold, use superscripts to number each key term, then in parentheses define each key term, and then demonstrate/explain
how it is used/relates to the article. For example: This article discusses goods1 (tangible items) such as bananas. The
workers who pick the apples are providing a service2 (an intangible item).
Type the assessment of the article on a word document. The top line of the document should include your name and
the name of the article. Change the margins for the entire document to 0.75. When you are finished writing create a page
break and attach the article you are writing about. (20pts)

14. Reflection:
Make sure to put an overall explanation of the assignments are and a reflection statement on your ePortfolio web
site. Your reflection statement should analyze what they have learned in this class, how it applies to other classes that
they have taken or are taking, and how they think it is going to benefit them in the future. For other examples of
reflection prompts please see SLCCs website: https://www.slcc.edu/gened/eportfolio/docs/ReflectionHandout2.pdf. (10
pts)