The main guideline is to apply any topic learned in class to a real...

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The main guideline is to apply any topic learned in class to a real macroeconomic situation in a country of your choosing. Usually, most students find it easy to discuss a macroeconomic stabilization policy (based on the IS-LM or Mundell-Fleming frameworks). However, if you decide to focus on growth (Solow growth model) that should work just as well. The example below will be based on stabilization policies. This is an outline for your paper:
1. Introduction: This is an executive summary for your paper. Explain which country you picked, what macroeconomic crisis (shock to AD, shock to AS…) and what stabilization policy was adopted (expansionary/contractionary Fiscal/Monetary…). Briefly anticipate your conclusions as well. (1-2 pages)
2. Body: Organize the details of your research and analysis as follows:
a. Background: Any descriptive statistics about your country that are relevant to your paper. Do not go into irrelevant data, just because you found it available online. (1-2 pages)
b. Macroeconomic Shock: Describe what happened (Financial Crisis, 2008 recession, Contagion from another country…) and how your country was affected (recession drop of x% for y quarters, inflation problems, depreciation of the currency, unemployment went up by z points…). (1-2 pages)
c. Stabilization Policy: Explain what macroeconomic policies, if any, were put in place in response to the shock you just described (Monetary expansionary/contractionary, Fiscal expansionary/contractionary, Exchange rate devaluation…). (1-2 pages)
d. Macroeconomic Assessment: give your judgement based on what you have learned in class. This is where you can show me that you are able to apply the theoretical lessons to something you have seen in current events. You might agree with the policies adopted or not. (1-2 pages)
3. Conclusion: Summarize your paper thesis, your findings and your results. Here you can expand on what your assessment is. (1 page)
4. References: Cite any relevant source you used to prepare your paper. (1 page)

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For this submission, the selected country is the U.S. while the macroeconomic crisis emphasized will be the 2007/8 financial crisis. The onset of the crisis was in 2006 after a vast decline in house prices. Banks and other financial institutions took on improper practices and this made the crisis inevitable. As this paper will attempt to portray, the crisis caused mixed effects, that is, both desirable and deleterious effects. For instance, the scope of employment shrunk substantially and this was primarily due to the fall of numerous companies and the desire to reduce the cost of operation through condensed production/operation capacity. Besides, the level of wage income lowered because of massive loss of jobs. Despite the case, the American dollar was a major beneficiary given the notion that it surged significantly when measured against the yield on 10-year treasury. The key to the improved currency value was the hoarding behavior of foreign investors. Nevertheless, the adverse effects tended to outweigh the positive impacts. Hence, the U.S. government, working in partnership with other stakeholders, made concerted efforts to assure that the economy recovered effectively and that future crisis of similar nature was curbed. To be more precise, Congress came up with fiscal expansionary policies to stabilize the economy. It is right to claim that the U.S. government was spot on with the stabilization policy at least when argued within the IS-LM model. Based on what I have learned in the class, the design of the policies adopted by the government was adequate.
Before looking at the financial crisis of 2007/2008 as it related to the U.S., it is of central importance to explore the statistical macroeconomic information about the country. The essence of this is to help the reader to gain an adequate understanding of America post-financial crisis. The focus will be laid on three pertinent variables namely currency, unemployment, and wage income.
Drawing from the graph above, wage income, which refers to the sum or the aggregate of all wages, all...

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