General Education Assessment
The citizens of Econopolis are in the midst of an 18 months downturn, which started when the tiny nation began shedding jobs at an alarming rate. The nation’s GDP dropped from a high of $100 billion to an all-time low of $60 billion. There are fears that the nation could collapse.
The Econopolis Council of Economic Analysis had pronounced the land to be in recession three months after workers’ layoffs began. The Government of Econopolis implemented some policy measures to stop, or at least shorten the recession.
For example, the government increased civil servants’ salaries, sent $100 to each of one million citizens of Econopolis, and revived some public work projects that were abandoned years back. The head of the government also asked the Econopolis Central Bank to lower the interest rates to stimulate borrowing by the private sector.
Immediately after all the measures were implemented, prices in Econopolis began rising very rapidly. Econopolis was getting worse by the day. The government ran out of options and called you for help. As an economic policy expert, the government of Econopolis wants your help to devise a policy that will help return the tiny nation to its glorious past. The documents provided to you show that the Econopolis marginal propensity to consume is 0.75, and the current inflation rate is 200%.
Based on the information provided, prepare an economic policy brief to be submitted to the government of Econopolist that outlines the most appropriate course of action required to return the nation to stability. Your policy brief should include:
1. an assessment of the current situation,
2. an evaluation of the government’s response to the recession,
3. the proposed plan for moving forward.
Use all appropriate tools and models (graphical and mathematical) you learned in your macroeconomics course to support your response.
Your report should be 2-page (800-word, single-spaced) policy brief covering the three main areas described above.
Please note that this is a report that will be read by non-economists. Government officials are not economics experts. The report will have three main parts: introduction, discussion sections, and conclusion, and use the APA format. The report should also include formatting elements such as headings, bulleted or numbered lists, graphs, and mathematical equations.
Following the APA format, you should reference all ideas, statements, and information borrowed from others appropriately. Your submission will be checked for plagiarism using SafeAssign.