Economics for Management (23706) Assignment: Macroeconomic Analysis

This economics assignment report delves into the impacts of monetary policy and government expenditure on an economy, particularly focusing on how these policies affect interest rates, inflation, exchange rates, and GDP growth. It explores the roles of central banks in managing money supply and the effects of fiscal policies, including discretionary and automatic stabilization methods. The assignment, prompted by the International Monetary Fund's revised GDP growth forecast, involves applying macroeconomic variables to the AD-AS model, analyzing the current economic situation influenced by factors like Brexit and trade wars, and making a six-month economic forecast. The report also considers how the central bank might adjust the cash rate in response to the economic outlook. The analysis includes key macroeconomic indicators and their influence on economic phases, providing a comprehensive overview of economic management and forecasting.

Economics Assignment

Government Expenditure Monetary
Policy
 Monetary Policy affects the supply of money in an economy that affects the interest
rates and the inflation rates. It also impacts the rate of employment generated and
total cost of debt and the relative consumption of savings, thus we see that the overall
government spending is affected by these monetary policies. The major affect is on
the exchange rates that the countries have to offer and how does the economy gain or
loss from the same. In case of expansionary monetary policy it involves the central
bank as the primary body that regulates the flow of money in the economy and the
movement of the same through different sectors. This indirectly affects the growth of
the GDP and the movement of the shares in the economy.

Government expenditure fiscal
policy
 The public sector involves government spending, raising revenue and borrowing and it
plays an important role in any economy. The government is spending money based on
two categories that includes current spending and capital spending. The major areas
where these spending goes includes Social protection, health, education, debt interest
and defense. There are two types of fiscal policy in this regard and that includes
discretionary policy and automation stabilization where the economy is stabilized
through methods known as fiscal drag and fiscal boost. The aim of the government is
to constraint the borrowing and to achieve financial stability and these rules often set
limits with respect to spending and borrowing as a percentage to the GDP. In case the
government is able to curb that the economy will prosper.


References
 Boghossian, P. (2017). The Socratic method, defeasibility, and doxastic responsibility.
Educational Philosophy and Theory, 50(3), 244-253
 Wendt, K. (2018). Positive Impact Investing: A Sustainable Bridge between Strategy,
Innovation, Change and Learning (first ed.). Switzerland: Springer.