ECON7021
Policy Response
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Assessment Task
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Policy Response
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Assessment Type
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Research Report
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Group or Individual
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Individual
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Weighting
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30% of course (100 marks reweighted to 30%)
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Word Limit
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1,000 words
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Due Date
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10 June, 4 pm
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Marking Rubric
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Blackboard > Assessment > Policy Response > Marking Rubric
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Submission
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Submit your assessment as a Word document on Turnitin via the course Blackboard site. (See submission details on page 7 of this document.)
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Context
In this assessment task, you must utilise the IS-LM and AD-AS models to illustrate short-run economic fluctuations and the movement to long-run equilibrium.
Assume a large open economy with a floating exchange rate. Ensure your graphs align with the appropriate IS-LM (upwards-sloping LM curve) and AD-AS modelling frameworks. Always draw the IS-LM diagram above the AD-AS diagram and show the connection between both graphs.
You must complete this part of the assessment task for your allocated policy mix, with the fiscal and monetary policy mix allocation indicated in Table 1 below.
Table 1
Shock and Policy Mix Allocation
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Last digit ofyour eight-digit student ID
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Shock and fiscal and monetary policy
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0 or 1
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a) Negative demand shock
b) Expansionary monetary policy
c) Adjustment of inflation expectations (if needed)
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2 or 3
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a) Negative demand shock
b) Expansionary fiscal policy
c) Adjustment of inflation expectations (if needed)
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4 or 5
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a) Positive demand shock
b) Contractionary monetary policy
c) Adjustment of inflation expectations (if needed)
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6 or 7
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a) Positive demand shock
b) Contractionary fiscal policy
c) Adjustment of inflation expectations (if needed)
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8 or 9
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a) Negative demand shock
b) No fiscal or monetary policy
c) Adjustment of inflation expectations (if needed)
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PLEASE NOTE:
• Your task is based on the last digit of your complete student ID (number). So, for example, if your student ID is 44194358, then your allocated shock and policy mix is:
a) Negative demand shock
b) No fiscal or monetary policy
c) Adjustment of inflation expectations (if needed)
• The number in your student email address (e.g., S4419435) is not your student ID; it
misses the last digit (i.e. 8 in this example). A 30-mark penalty (out of 100 marks) will be applied if you fail to follow the scenario allocation rules.
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Important hints:
• Use different colors for a) b) c).
• First, explain what happens to GDP, interest rates, unemployment, and inflation as a result of the shock in a) . Show it in the diagrams.
• Second, explain if the policy in b) makes sense and how it affects GDP, interest rates, unemployment, and inflation. Show it in the diagrams. For students with “No fiscal or monetary policy”: explain which economic mechanism will bring the economy back to potential GDP over time.
• Third, explain if the inflation rate in your graph is consistent with inflation expectations. Show how your graph is changing when inflation expectations adjust to the situation in your graph.
Additional Requirements
Please also adhere to the requirements listed on the next page when compiling your research report. Penalties will apply, in line with the marking rubric, if you fail to follow these instructions.
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PLEASE NOTE: You must use the research report template on Blackboard > Assessment > Policy Response > Template. The template includes a cover sheet. Complete and include this cover sheet with your submission. Do not start your research report on the cover page. Instead, the first page of your research report should be the page after the coversheet (as in the template).
• Formatting requirements:
o Word document
o Font type and size: Arial 12
o Line space: 1.5
• Referencing style: References and citations must be inAPA 7threferencing style.
o Consult theAPA 7th referencing styleguide.
o You can use direct quotes, provided the total number of quoted words is 20 or less in the research report.
• Word count:
o The word count excludes the cover sheet, title, section headings, short tables, figures and figure headings, figure notes, and the reference list.
o The word count includes your writing and in-text citations.
• Tables and graphs:
o Your research report (Part 1 and 2 combined) may include a maximum of four (4) figures. No tables are required.
o Figures may only contain more than one graph if those graphs are interconnected, e.g. adding the IS-LM and AD-AS models in a figure’s top and bottom panels, with the interconnected variable being output (Y) on the horizontal axes of both graphs.
o You must produce your own figures rather than cut and paste them from other
sources.
• General:
o Do not use footnotes or endnotes.
o Use the marking rubric to guide your assessment planning and writing.
• Turnitin:
o The Turnitin similarity percentage of your report must be below 35%.
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