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Questions for Group Discussion Assignment
1. Analyze how a persistent current account deficit can impact a country’s exchange rate,
foreign reserves, and economic growth. Propose three policy measures the central bank and
government could use to stabilize the balance of payments, and critically evaluate the trade-offs
of each measure.
2. During periods of high inflation and slow economic growth (stagflation), governments often
debate whether fiscal policy (spending and taxation) or monetary policy (interest rates and
money supply) is more effective. Develop an argument on which policy should take priority in
such a scenario, and explain the potential short-term and long-term consequences of your choice.
3. Compare the efficiency and consumer welfare implications of perfect competition and
monopoly. Argue whether government regulation of monopolies always improves social
welfare, or if it can sometimes create unintended inefficiencies.
4. GDP growth is often celebrated as a sign of economic progress. However, critics argue that
GDP fails to capture key aspects of social welfare and environmental sustainability. Propose and
justify two alternative indicators that could complement or replace GDP in measuring a
country’s economic performance.
5. Consider a sudden increase in global oil prices. Using the AD/AS framework, illustrate and
explain the short-run and long-run effects on output, prices, and employment. Recommend
policy interventions to minimize negative impacts while maintaining long-term growth.
[Link] how government-imposed price ceilings or floors can create market distortions. Under
what circumstances, if any, can price controls improve overall economic welfare?
[Link] how the principle of diminishing marginal utility underpins the downward-sloping
demand curve. Are there goods for which this relationship might not hold? Explain.
8. In many economies, the informal sector is large but difficult to measure. Discuss how this
affects the accuracy of GDP data and fiscal planning. Suggest methods that could improve the
measurement of economic activity outside formal statistics.
[Link] the different types of unemployment (frictional, structural, cyclical, and seasonal).
Discuss how each type can affect a country's economy and which policies might be effective in
reducing unemployment. Provide examples of real-world situations that correspond to these types
of unemployment.
[Link] how expansionary and contractionary fiscal policies can influence both short-term and
long-term economic growth. In your answer, consider how changes in government spending and
taxation can affect aggregate demand and aggregate supply, and how these effects translate into
GDP growth and employment levels.
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[Link] how central banks use monetary policy to control inflation. Discuss the tools available
to central banks and the mechanisms through which these tools affect inflation rates, interest rates,
and economic growth. Include examples of how monetary policy has been used in recent economic
crises to stabilize the economy.
[Link] how rising inflation affects the real interest rate for borrowers and lenders. If a
borrower takes out a fixed-rate loan during a period of low inflation, how might rising inflation
impact their repayment burden compared to the lender's expected return?
[Link] how commercial banks create money through the process of making loans.
Illustrate your answer using an example where a bank receives a new deposit of $5,000, with a
reserve requirement of 20%. Calculate the maximum potential increase in the money supply
due to this deposit
14 a. Explain at least three key indicators commonly used to measure changes in the standard of living.
How do these indicators reflect the well-being of a population?
b. Discuss the limitations of using GDP per capita as a sole measure of the standard of living. Provide
examples of situations where GDP growth does not translate to improved living standards.
c. Propose alternative or complementary measures that policymakers could use to assess improvements
in quality of life. Justify why these measures might be more effective.
15. a. Describe the concept of currency depreciation and explain the factors that might cause a
currency to lose value relative to others.
b. Analyze how a depreciated currency can create opportunities for export-driven growth.
Include examples of sectors or industries that may benefit the most.
c. Evaluate potential risks associated with a weak currency, such as inflation or increased import
costs, and suggest strategies a government could implement to mitigate these risks while
promoting economic growth.
Group Discussion Assignment Instructions
1. Objective: Each group is required to discuss and answer assigned questions based on the
provided topics. The purpose is to encourage critical thinking, collaborative learning, and
clear articulation of ideas.
2. Group Allocation: Each group will be assigned specific question. Assign each question
number to the group with the matching number of that group.
3. Discussion Guidelines:
a. All group members should actively participate in both the discussion and preparation
of answers.
b. Ensure answers are well-reasoned, supported with examples, and clearly explained.
c. Respect differing opinions and aim for a consensus or a well-justified group stance.
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4. Virtual Presentation:
a. Each group will present their findings via a virtual platform (Zoom, Teams, or similar).
b. Presentations should last between 8–12 minutes and be clear and concise.
c. All group members should participate in the presentation, explaining their parts.
5. Submission:
a. Compile your group’s written answers in a single document.
b. Include the names and computer numbers of all group members, along with your group
number.
c. Submit the document by the date to be advised.
6. Evaluation: Groups will be assessed on the quality of discussion, depth of analysis,
clarity of explanations, teamwork, and the effectiveness of the virtual presentation.