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The Macroeconomic Paper tests your ability to apply economic
principles to a business decision considering the impact of
macroeconomic variables. Select one situation from the items outlined
below: A to D. Complete the paper on the selected situation as specified
below. The completed paper is a professional report and is due in Week
6 (260 Points). See the grading rubric at the end of this document. Be
sure to use the DeVry library to find data, and avoid questionable
sources, such as Wikipedia.
Each of the scenarios has a list of Macroeconomic areas you are to
address, with sources, in your answer. Briefly you are to research and
show how these apply to your scenario: GDP growth rate (20 points), the
business cycle (30 points), fiscal policy and level of unemployment (50
points), monetary policy and interest rates (50 points), international trade
(40 points), and demographics (20 points).
Situation A
Rick, your friend, runs a small manufacturing plant that produces parts
for the auto industry. Rick is thinking of expanding his operations to
meet the increasing demand from car manufacturers. Hearing of your
taking this course in business economics, he asks you for advice on how
to go about making the expansion decision.
At first you are reluctant to give investment advice, but then you happen
to read the piece “U.S. Auto Sales Estimates Cut as Confidence Slows
Rebound” on page 634 of the textbook. You suddenly realize that Rick
needs to take a number of macroeconomic variables into consideration
for the expansion decision. You decide to research the economy in terms
of GDP growth rate, interest rates, level of unemployment, the business
cycle, fiscal policy, monetary policy, international trade, and