Eco 372                       Week 3 Aggregate Demand Assignment

The Aggregate Demand (AD), Aggregate Supply (AS) model is used to predict the consequences of many different events, including the events described below.  After reading these, describe three specific events that could have caused the shift shown in the graph below, using your own words.

• When the stock market is booming, people are wealthier, so they are likely to purchase more goods and services.  A stock market boom or a stock market crash can cause AD to shift.

• Consumers are much more likely to purchase big-ticket items on credit when interest rates are low.  In addition, business owners are more likely to borrow money to finance investment projects when interest rates are low.  Therefore, a decrease or increase in interest rates can cause AD to shift.

• Lower tax rates result in more take-home pay, giving households more purchasing power.  Tax cuts or tax hikes will cause AD to shift.

• When consumers are confident about the future and feel secure in their jobs, they are more likely to make purchases.  If consumers are worried about a recession or being laid off from their jobs, they will likely cut back on unnecessary spending.  Similarly, business owners are more likely to engage in expansion when they are optimistic about the future.  Changes in consumer confidence and business expectations affect AD.

• The federal government can engage in fiscal policy by increasing or decreasing government spending or taxes.  Fiscal policy can be used to cause AD to shift.

• The Federal Reserve can engage in monetary policy by increasing the money supply to lower interest rates or decreasing the money supply to raise interest rates.  Monetary policy can be used to cause AD to shift.

   

Describe three specific events that could have caused the shift shown in the graph, using your own words.

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the course name is business planning 

Assignment #2: Identify One Marketing Opportunity for New Product 

As mentioned before, one of marketers’ major tasks for marketing management process is to identify unmet needs of target customers after implementing the trend analysis as a part of situation analysis. As an example, marketers within the for TV industry provide the forecast of what kind of TV will appear in the next few years, given that black & white TVs, color TVs, HD TVs, Smart HD TVs, etc. have so far been introduced into the market. The forecast as the output of trend analysis will provide you with some clues about consumers’ unmet needs for new TV product idea. 

To this end, it is recommended that you should 1) implement environmental or situation analysis to identify a list of major trends occurring in your chosen marketing field, 2) convert them into a list of new product ideas, and 3) suggest a new product concept and specific marketing goals for this new product, after implementing 5C situation analysis for justification. For instance, you, as a marketer of GPS company, can identify several new GPS product ideas after monitoring major trends in the GPS industry and design the detailed concept of one new solar GPS system. The following is the format of the report you may consider when composing. 

• Specify your role as a marketer in your chosen marketing field or industry as you did in Lecture Assignment #1. 

• Monitor current market environment in your chosen field and identify at least 5 major trends which had occurred, are occurring, and will occur in the target market in your chosen marketing field;