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Macro Economic

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B. As a portfolio manager whose firm has investments in a country with a high level of debt what would you do to increase your firms profit and/or protect their interest if:

Experts have recommended to the country that it exchange rate should be pegged at the equilibrium level. And, the foreign exchange reserves of the country are decreasing at a dramatic weight.

Be sure to explain why the countryâ??s exchange rate is either over-valued or under-valued.

Use graphs and other information to support you answer, where applicable.

C. Assume a substantial amount of liquidity has been pumped into the economy and that the federal fund rate has been cut. Also assume, Congress has passed a new stimulus bill that raises marginal tax rates but also offers tax credits for small business that begin employing people.

State and explain what you think will likely happen, on a macro level, as a result of these actions. State and explain how you think these macro-level changes will effect big businesses. Use graphs and other information to support you answer, where applicable.

Use graphs and other information to support you answer, where applicable.

A. After spending years on trying to get a handle on healthcare, assume Congress was able to accomplish the following tasks:
1. Completion and passage of a bill that expands insurance coverage to millions people (low/mid income) through the distribution of tax credits and extension of Medicaid.
2. Completion and ratification of a Contractual agreement with Pharmaceutical companies that results in a significant cost savings, nearly 100 billion, over 15 years.

State and explain what you think the impact of the new regulatory reform and concessions changes will have on 1) the economy on a macro-level and 2) specifically pharmaceutical companies that spend over 30% of their gross income on research and development.

Use graphs and other information to support you answer, where applicable.

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The Two Branches of Macro-Economic Theory: Thinking Like a Macro-Economist

Macro-economics is perhaps the most divisive area of economics when applied to political decision making, and macro-economists divide themselves into different schools of thought. Two of the biggest camps are the Keynesians and the Monetarists. Keynesians and post-Keynesians follow the theories of John Maynard Keynes, the most-celebrated economist of the 20th century who proposed that government stabilize the economy with the use of fiscal policy. Monetarists, on the other hand, follow the teachings of Friedrich Hayek. For this assignment do some research on the ideas of Keynes and Hayek. Focus on the "big picture" of what their main ideas are and how they have influenced policy makers. Then write a 3 to 4-page paper addressing the following questions:

1. Compare and contrast what policies Keynes and Hayek advocated regarding how the federal government should manage the economy. (Note: There is no need to include biographical information about their lives)

2. Explain one real-world event that counters the theories of each of the following: Classical, New Classical, Keynesian, New Keynesian, and Monetarist.

3. Explain one real-world event that supports the theories of each of the following: Classical, New Classical, Keynesian, New Keynesian, and Monetarist.

4. You have learned that Keynes and Friedman sharply differed on some basic ideas of how the Federal government should conduct economic policy. Which of the two economists do you agree with more, and explain why.

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