Macroeconomics Task

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Macroeconomics Task brief

Mid-term make-up Task

This is an individual task. Avoid any “copy-paste” practice to prevent possible problems of plagiarism.

With reference to the theories covered in class and with the use of wider research that involves the referencing of data, you should complete a report, which analyses and evaluates different features of markets and cost structures addressing the following questions/topics:

  1. From the following economic transactions, which ones increase Spanish GDP? Explain which components of the GDP are affected and its magnitude and why.
  • A Spanish car rental company spends $15M to buy 30 SEAT (Spanish brand) new cars that were made in Spain.
  • A Spanish car rental company spends $15M to buy 30 new Toyotas that were made in Japan
  • Spanish government buys a Spanish-made robot and pays $10M
  • A Japanese car rental company spends $15M to buy 30 SEAT new cars that were made in the Spain.
  1. Explain how government deficits affect long run economic growth. Explain how this effect is transmitted. You should complement your explanations with some graphs.
  2. Imagine that Donald Trump is promoting a tax incentives for savings. Explain how this policy affects market for loanable funds. Justify graphically your answer.
  3. What is economic growth? Is it the same as increasing wellbeing and living standards of population? Explain the links between economic growth and each of these concepts: consumption, investment, and public policies (20%).
  4. Explain how Consumption Price Index and inflation are calculated and explain why high inflation should be avoided in an economy (20%).
  • Always refer to the concepts explained in class.
  • Write a report in word or other text editor and upload it in pdf format.


  • Wordcount: 1500-2000
  • Cover, Table of Contents, References and Appendix are excluded of the total wordcount.
  • Font: Arial 12,5 pts.
  • Text alignment: Justified.
  • The in-text References and the Bibliography must be in Harvard’s citation style.

Submission deadline: Sunday, 24th of May 2020 at 23:59

Weight: This task is a 40% of your total grade for this subject.

It assesses the following learning outcomes:

  • Outcome 1: understand the forces determining macroeconomic variables such as national output, inflation, unemployment, and interest rates;
  • Outcome 2: apply macroeconomic terminology and assess macroeconomic policy suggestions;
  • Outcome 3: evaluate real life situations with a practical application of the acquired tools and knowledge.

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