Econ Homework

1.     The title of an article in the Wall Street Journal read:

“Inflation Slows Amid Plunge in Oil: Soft Growth in Consumer Prices Could Complicate Fed’s Thinking on Interest-Rate Increases”

(by Ben Leubsdorf. January 16, 2015. Retrieved from http://www.wsj.com)

Use a macro model to demonstrate how consumer prices are affected by the “plunge” in the price of oil. Be sure to explain!

2.     An article in the NYTimes read:

“Impressed with an improving economy, American consumers are feeling more confident….”

 (Associated Press. “US Consumer Confidence Rises in December.” New York Times, December 30, 2014. March 30, 2014. Retrieved from http://www.nytimes.com)

Explain the effect this will have on the economy. Use a Macro Model to demonstrate the effect.

3.       An article in the NYTimes read:

“Companies are holding off on purchases of computers, industrial equipment and other long-lasting manufactured goods, a trend that is slowing the American economy.”

(Associated Press. “Business Confidence Remains Weak.” New York Times, October 11, 2012. Retrieved from http://www.nytimes.com.)

Explain the effect this will have on the economy. Demonstrate the effect using two graphs: Long-Term Capital Market and Macro Model.