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Ab204-02 Macroeconomics Unit 6 Assignment

PART 1: Comparing Long-Run Economic Growth Rates of Countries

Use the electronic library and databases to conduct research to identify the key factors that determine long term economic growth. You can find the most up-to-date reports on the economic growth trends of different countries under the World Bank website linked below.

http://data.worldbank.org/products/wdi

Please also refer to the Webliography in the course web page for additional information on the researches done on economic issues.

After you have conducted research and read the items listed above, access the “Data & Research” tab in the World Bank website and compare growth rates between two countries of your choice. Specifically, select one advanced economy (such as U.S., Germany, etc.), and select one developing economy (such as Angola, Bangladesh, etc.).

Download their data for major economic indicators (2005–2013) such for the real GDP growth (annual %). Then identify and describe possible factors that may explain the differences between the GDP growth rates and long term economic growth of the advanced and developing economies for the countries you selected.

**Somalia does not participate in the bond market, commercial banking or lending, net domestic credit, and there is also no cash surplus. The United States however does participate in all these which is why the GDP is higher and also why it has a great investment market. The difference between these factors is there is not depth in the country Somalia when it comes to investing as a whole. It is basically land with no structure for the work force. Currently the regime in charge has no order and this would explain why the development of this country has slowed if not stopped.

PART 2: Loanable Funds Market

  1. Examine each of the following scenarios in the market for loanable funds. Explain the impacts on private savings, private investment spending, and the rate of interest under each of the following events. Assume the economy is autarky (closed) and it does not have trade and capital transactions (flows) with foreign countries.

Unit 1 [ BU204: Macroeconomics ] Unit 1 Assignment This Assignment deals with the Ten Principles of Economics and their applica±ons to diFerent scenarios. Each scenario below prac±ces one of the 10 principles of economics. Match the principles to the appropriate scenario listed and jus±fy your answer. Each principle will only be used once. Refer to chapter one for the details on the ten principles of economics. Ten Principles of Economics: 1. People face tradeoFs. 2. The cost of something is what you give up to get it. 3. Ra±onal people think at the margin. 4. People respond to incen±ves. 5. Trade can make everyone be²er oF. 6. Markets are usually a good way to organize economic ac±vity. 7. Governments can some±mes improve market outcomes. 8. A country’s standard of living depends on its ability to produce goods and services. 9. Prices rise when the government prints too much money.

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