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WRITING ASSIGNMENT : GOVERNMENT POLICY LEARNING OBJECTIVES Describe the role of the major participants in the economy and how they affect it. . Identify the key variables necessary for assessing the status of the economy. Recognize the major schools of economic thought and their approach to solving economic problems. INSTRUCTIONS In this writing assignment, you will acting as an economic consultant to the fictional country Marketopia. Based on the information in the scenario included below, you will create a written report addressed to the country's president, legislature, and monetary authority (central bank) recommending possible government policy that could solve the problems brought up in the scenario. Your written report must meet the following requirements: 1-2 pages double spaced, 12 point font Formatted in paragraphs, not a numbered list All parts of the scenario are fully addressed. Diagrams can be included but are not required (and do not count towards the page limit) SCENARIO You have been selected by the president of Marketopia as the newest economic advisor. Based on current data about the economic situation in Marketopia, you are preparing to write your first report advising the government how to best improve the economy. Specifically, your report should cover: . What economic problems is Marketopia currently facing? Which problems are the most urgent? What perspective is the current economic advisor using to make her recommendation? Do you think her strategy will work?. What government policy do you recommend to solve Marketopia's economic problems? You can recommend both fiscal and monetary policy. What will be the impact of your recommended economic policy? Are there any potential negative effects? What long-run changes might Marketopia see if there is no government action? Are there any changes that could be made to make Marketopia more stable in the long run? MARKETOPIA DATA You have been given the following data on Marketopia's economy. All economic statistics are calculated using the methods mentioned in class. Statistics are released quarterly (every three months). Real GDP Period Unemployment CPI ($ Billions) Rate Q1 2020 1.46 12% 210 Q2 2020 1.40 12% 209 Q3 2020 1.25 10% 210 Q4 2020 1.5 7% 211 Q1 2021 2 1% 213 Q2 2021 2.3 4% 216 Q3 2021 2.4 3.8% 220 Q4 2021 2.5 1% 225 Q1 2022 2.55 3-7% 231Real GDP r L nemploylnent CPI Period ($ Billions) Rate - Marketopia 2020 Population: 10,294,500 - Average Yearly Population Growth: -2% 0 Current Government Debt: $500 million You have also been given the following information from the Bank of Marketopia, the country's central bank: 0 Target Inflation Rate: 1.5% 0 Estimated Natural Rate of Unemployment: 5% - Current Interest Rate Target: 2.25% 0 Last Interest Rate Target Change: June 2020 (decrease from 5% to 2.25%] - Current Reserve Requirement: 5% - Last Reserve Requirement Change: May 2015 {decrease from 10% to 5%} 0 Current Discount Rate: 4% - Last Discount Rate Change: January 2013 {increase from 2% to 4%] - Interest Rate on Reserves: 0% {never offered) You also have the following statement from the previous economic adviser: \"Any issues with Marketopia's economyr have been entirely caused by the Bank of Marketopia. I tried to warn the director multiple times that there was no reason to change the target interest rate in 2020. They did not heed my advice, and now we are in the current situation. The only thing we can do now is get that directorto do the right thing and undo the mess they created. There's no reason to involve the legislature. lClnly monetary policy can have any real effect anyway." HI QSearlch. \"ndeoalel