Select one situation from the items outlined below: A to D. AND complete the paper on the selected situation as specified below:
SCENARIOS: (Select any situation you want)
Each of the scenarios has a list of macroeconomic areas you are to address, with sources, in your answer. Research and show how these apply to your scenario: GDP growth rate, the business cycle, unemployment, and inflation, fiscal policy and level of unemployment, monetary policy and interest rates, and demographics.
Situation A:
Jenny, your niece, is a smart high-school student who wants to make smart choices for her future. Hearing of your course in Business Economics, she has emailed you asking for advice on whether to become a medical doctor and on the best location to practice it. She recognizes the high costs of tuition and the years of study involved in becoming a doctor. She wants to evaluate if that career choice is an optimum decision for her. So she has asked you for advice.
Having read the introduction to Chapter 1 on page 3 of the textbook, you recognize the significance of such a career decision for Jenny. You decide to examine the significance of the influence that macroeconomic conditions can have on the success of a profession. So you research the economy in terms of GDP growth rate, interest rates, level of unemployment, the business cycle, fiscal policy, monetary policy, international trade, and demographics. You want to provide Jenny with the most informed advice possible. In addition to macroeconomic issues, you also evaluate the career choice from longer-term perspectives.
Situation B:
Your neighbor Cindy wants to start a contracting business for installing solar panels. She has heard of the cost savings that households and businesses can make each year from installing solar panels on the roofs. Cindy has also heard of government incentives for installing solar panels. Being concerned about the environment and wishing to reduce pollution, Cindy thinks installing solar panels also serves a social purpose. But she does not want to risk her life's savings on a venture that might not succeed or become profitable enough. After hearing from you about taking this course in Business Economics, she decides to ask you for advice.
At first you were hesitant to give investment advice. Then you read the section "Losing Money in the Solar Panel Industry" on pages 402-403 of the textbook, and the need for differentiation in Chapter 13. You realize there are more pieces to the decision than Cindy is considering. You decide to research the significance of the influence that macroeconomic conditions can have on the success of a business. So you research the economy in terms of GDP growth rate, interest rates, level of unemployment, the business cycle, fiscal policy, monetary policy, international trade, and demographics. You want to provide Cindy with the most informed advice possible. In addition to macroeconomic issues, you also evaluate the business idea from longer-term perspectives.
Situation C:
Cousin Edgar is always thinking of the next business idea. This time, he plans to invest in buying two gas stations. He reckons American consumers have come to accept the high gasoline prices, and estimates world prices for gasoline will increase even further due to increasing high demand from India and China. Besides, Cousin Edgar thinks he will make a good profit on the sale of convenience items at each station. But before buying the gas stations, he decides to ask for your advice since you are taking this course in Business Economics.
You recall reading about making pricing decisions for gasoline on pages 173-174 of the textbook. You also recall reading about perfectly competitive markets in Chapter 12, and the need for differentiation in Chapter 13. Being skeptical of Cousin Edgar's optimism on the profitability of selling gasoline and convenience items, you decide to research the significance of the influence that macroeconomic conditions can have on the success of a gas station. So you research the economy in terms of GDP growth rate, interest rates, level of unemployment, the business cycle, fiscal policy, monetary policy, international trade, and demographics. You want to provide Cousin Edgar with the most informed advice possible. In addition to macroeconomic issues, you also evaluate the gas station idea from longer-term perspectives.
Situation D:
After hearing of your taking this course in Business Economics, your college friend has emailed you asking for advice on opening a restaurant. Your friend Rajeev reminded you of his popular recipes for Indian food, and shared his dream of building a franchise business modeled on the P.F. Chang chain of restaurants. He reckons that creating special fusion recipes based on a popular ethnic cuisine will provide the restaurant chain with sufficient differentiation to become profitable and to grow nationwide.
Luckily before you could find time to answer Rajeev's email, you read the pieces on Starbucks and opening a restaurant, on page 425 of the textbook. Recognizing the costs and risks for Rajeev, you decide to research the significance of the influence that macroeconomic conditions can have on the success of a restaurant. So you research the economy in terms of GDP growth rate, interest rates, level of unemployment, the business cycle, fiscal policy, monetary policy, international trade, and demographics. You decide to educate yourself about the restaurant business so you can provide Rajeev with the most informed advice possible. In addition to macroeconomic issues, you also evaluate the restaurant idea from longer-term perspectives.
Your paper should be organized into five parts as listed below.
1. Title Page: Name, class, and date (DON'T WORRY ABOUT THE TITLE PAGE)
2. Introduction to situation but do NOT copy the scenario. Briefly summarize the situation and identify the macroeconomic issue(s) to be decided from the perspective of the organization.
3. Business cycles, unemployment, inflation, international-comparative advantage, exchange rates, trade, etc., monetary policy and interest rates, and fiscal policy and unemployment. Identify the variables that are critical in addressing the issue(s). Gather and present the relevant data on the variables by searching the DeVry Online Library. Ask a librarian for help if needed. Use in-text citation to report the source(s) of the data. Graphs may be included here.
4. Recommendations and Economic Justification
Formulate and present your recommendations for addressing the issue(s) based on the relevant data and economic principles identified above. Justify your recommendations in terms of the economic impact on those affected.
5. References
List the full references for at least five sources alphabetically in APA format.