Name: S Hayden Stewart

Section: ____________

E-Portfolio Signature Assignment

Salt Lake Community College
Macroeconomics - Econ 2020
Professor: Heather A Schumacker
Please type your answers to the following questions. 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 along with your chosen article and 20 terms
article write up. (20pts) Make sure to put an explanation of the assignments and a reflection statement on your ePortfolio web site.
For examples of reflection prompts please see SLCCs website: https://www.slcc.edu/gened/eportfolio/docs/ReflectionHandout2.pdf.
(10 pts) Link your ePortfolio URL to your MyPage under the student tab so that instructors can view your work. (5pts)
1.

2.

What are the 3 main macroeconomic goals economists would like to see for an economy: (3pts)
1. Full Employment
2. Stability
3. Economic Growth
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)

GDP =

Consumption

Components:
Circle the largest sub-category
1. Durable
2. Non-Durable
3. Services

3.

Investment

Government

(X-M)

Components:

Components:

Components:

1. Business Fixed Investment

2. Construction Investment
3. Inventory
Excludes:

1. Good
2. Services

1. Export
2. Import

1. Transfer of ownership of

1. Transfer Payments

paper/real assets

2. Interest on government debt

Excludes:

What is the problem associated with being at AD2 that makes policy makers concerned? (1pt)
Prices go up, dont want to buy as much, Tax cut, capital gains tax cut.

Q1

Q Full
Employment

Q2

REAL OUTPUT (quantity per year)

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: Congress -> President
1.

Contractionary Fiscal Policy

Decrease government spending in areas such as infrastructure, education and unemployment benefits.

2.

Contractionary Fiscal Policy

Increase taxes which will slow growth, as consumers will have less money to consumer and invest.

Who does monetary policy: Federal Reserve

1.

Open Market Operations

The Federal Reserve can help the situation by buying and selling treasury securities(bond) which will help boost
the economy.

2.

Reserve Requirement
This set by the Federal Reserve when times of economic trouble, messing with the reserve requirement will put
more money into the economy when it is needed.

3.

Discount Rate
It is the amount the Federal Reserve charges commercial banks to borrow reserves, this helping the economy by
changing that number ever so slightly.

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)
Money Supply and Money Demand Graph
Nominal
Interest Rate
Aggregate
Demand and
Aggregate Supply

Money Supply Curve (MS)

PL

Real GDP

\\\
\

AS

Money Demand (MD)

6.

AD

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)

Politics play a big part in what the government such as congress or the Federal Reserve does. Depending on the political situation of
our country can heavily decide what the GDP looks like. The process is not something that happens over night. The process to
improve our economy happens over time and we have to be patient. We also cannot just rely on fiscal and monetary policy to fix our
problems as a country; consumers need to step in and play their part in the band as well.

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)

This shows that the high amount of unemployment in SLC between 2010 and about 2012. As you drove up and down the
streets of SLC, the amount of homeless during that timespan was enormous and people were really struggling. We have now hit a
point where we would like to maintain our unemployment rate.
8.

List the 3 types of Unemployment, define each, and put a star next to those that are included in the natural rate of
unemployment. (8pts)
1. *Frictional Unemployment
Between jobs, short term unemployment. Workers who have quit, been fired, laid off, or just entered the work
force.
2.

*Structural Unemployment
Due to change in the structure of demand for labor. Lack of skill, language, or discrimination.

3.

Cyclical Unemployment
Caused by the extra unemployment that occurs during the recession phase. Very costly.

9.

What is the difference between nominal and real, why is each important? (4pts)
Real GDP is adjusted for inflation and Nominal GDP is not adjusted for inflation. Real GDP is important so we
can see real price values that pertain to todays market and todays economy while taking into account adjusted
inflation seeing a real number. Nominal GDP shows us a base number that we can use and work with,

politicians use these to hide the real numbers as this does not take into account for adjusted 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 2008?
10077.9
Based on the graph, what is the Real Government Consumption Expenditures and Gross Investment amount for the second
quarter of 2008?
2975
Based on the graph, what is the Real Gross Private Domestic Investment amount for the second quarter of 2008?
2472.6
Based on the graph, what is the real net exports of goods and services amount for the second quarter of 2008? (4pts)
550.4
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)
Most of the items that were graphed were at a peak and then they slowly declined after that. 2008 was a good year for the St Louis
area, and the numbers continue to rise today.

12. 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
in billions of chained 2009 dollars and what % of GDP is it

56%

What is the value of the current Real Government Consumption Expenditures and Gross Investment
billions of chained 2009 dollars and what % of GDP is it

Paste the pie graph here: (3 pts)

14%

2870.6

in

14%

What is the value of the current Real Gross Private Domestic Investment Expenditures
chained 2009 dollars and what % of GDP is it

11330.7

(6pts)

2852.7

in billions of

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)
Scenario 1:
Initial Deposit =
Reserve requirement =
Money Multiplier =
How many banks will it take to go through the multiplier process?
What will the Total New Deposits be?
How much in Total Excess Reserves will there when the multiplier process completes?
How much money will be created?
Bank number
1

New
Deposits
5,000

Required
Excess
Reserves
Reserves
500
4500
Scenario 2:

Initial Deposit =
Reserve requirement =
Money Multiplier =
How many banks will it take to go through the multiplier process?
What will the Total New Deposits be?
How much in Total Excess Reserves will there when the multiplier process completes?
How much money will be created?
Bank number
1

New
Deposits
5,000

5,000
10%
10
500
50000
45000
45000

Required
Reserves
2000

Excess
Reserves
3000

5,000
40%
2.5
250
12500
7500
7500