QUESTION 1 (TOTAL: 50 MARKS)

Choose ONE (1) topic below:

Question 1: Real-World Application

Choose a contemporary case or period of inflation (e.g., the recent inflation concerns in a
particular country or region).

• Define "inflation expectations" and explain why they are crucial in understanding and
managing inflation.
• Describe the economic context and factors contributing to the inflationary pressures.
• Analyze the response of the government or central bank to address the inflationary
challenges.

Question 2: Causes, effect, and Types of Inflation

• Identify and explain the main causes of inflation, including demand-pull inflation, cost-
push inflation, and built-in inflation.
• Provide real-world examples for each type of inflation and discuss the circumstances that
lead to their occurrence.
• Discuss the potential effects of moderate inflation on an economy, including its impact
on purchasing power, savers, borrowers, and fixed-income earners.
• Analyze how high or hyperinflation can disrupt an economy, citing historical examples if
possible.

Question 2: Real-World Application

Choose a contemporary case or period of unemployment (e.g., the impact of the COVID-19
pandemic on labor markets).

• Define "unemployment" and explain why they are crucial in understanding and
managing unemployment.
• Describe the economic context and factors contributing to the unemployment situation.
• Analyze the response of the government or organizations to address the challenges posed
by high unemployment.

Question 3: Real-World Application

Choose a contemporary example of fiscal policy implementation (e.g., a recent government

stimulus package).

• Describe the key tools and instruments used in fiscal policy, such as government spending
and taxation policies.
• Describe the economic context that prompted the fiscal policy action and the specific
measures taken.
• Analyze the expected short-term and long-term effects of the fiscal policy on the economy
and specific sectors.
Question 4: Real-World Application

Choose a contemporary example or case study involving GDP (e.g., the impact of the COVID-19
pandemic on GDP).

• Describe the four main components of GDP: consumption, investment, government

spending, and net exports. Explain what each component represents.
• Describe the economic context and factors that have influenced changes in GDP.
• Analyze the response of the government or central bank to address economic challenges
related to GDP changes.

Question 5: Money Supply and Its Components

• Describe the key tools and instruments used in monetary policy, such as open market
operations, the discount rate, and reserve requirements.
• Explain how changes in these tools can influence the money supply and interest rates in an
economy.
• Explain the concept of the money supply and its significance in monetary policy. Discuss
the components of the money supply, including M1 and M2.
• Describe how changes in the money supply can affect economic activity, including
spending, investment, and inflation.

GUIDELINES:

1. Based on the Question 1 above, you are required to make a report consisting of:

• Introduction- Background of the topic (Based on your option above)

• Type/Characteristics
• Advantages/Disadvantages
• Effects and Challenges
• Conclusion/Recommendation
• Reference (APA Format 6th & 7th edition)
• Any additional inputs or information (optional)

2. You are required to present your report in an executive summary format in week 13.
3. Your full submission report must be submitted in Week 14.
4. Your full submission report must be written in English.
5. Min pages of your report is 10 pages and max pages is 20 pages.