CFS Economics
Research Essay: Macroeconomics
Due date: Thursday 26th September 11.59pm (NZ time)
Assessment Weighting: 10%
Word Count: No more than 1,000 words
Answer the following questions in your essay:
1. Define the official cash rate (OCR) and other relevant economic terms. Explain the role of the RBNZ. Describe reasons for the two trends in New Zealand’s OCR, as highlighted in the RBNZ past monetary policy graph.
2. Research and explain the effect of the OCR policy change on 14th August 2024 on New Zealand’s exchange rate.
3. Research and explain why the RBNZ decided to decrease the OCR on 14th August 2024.
4. With reference to graphs and using your knowledge of economic concepts explain the possible impact that the recent decrease in the OCR (and further potential decreases in the OCR) may have on New Zealand’s economy.
ESSAY STRUCTURE REQUIREMENTS
TITLE PAGE
INTRODUCTION
Statement of intention – provide an overview of the intention of the essay and an outline of how you will answer the question (ie state the economic models you will use) .
BODY
Part A:
Define official cash rate (OCR) and other relevant economic terms.
Explain the role of the RBNZ and its effect on retail banks.
Describe reasons for the two trends in New Zealand’s OCR, as highlighted in the RBNZ past monetary policy graph.
This should be brief and include the following:
1) Definitions of three relevant economic terms. (eg monetary policy, OCR, expansionary or contractionary monetary policy).
2) Explain the role of the RBNZ and state how registered banks in NZ will react to the drop in the OCR on 14th August 2024.
3) Briefly describe the reason for the two trends in the OCR in June 2008 – March 2009; and October 2021 – April 2023 (see page 3).
4) Include a graph that supports the trends in 3) above.
5) Provide at least one citation, correctly formatted using APA (7th Edition).
Part B:
Research and explain the effect of the OCR policy change on 14th August
2024 on New Zealand’s exchange rate.
This should include the following:
1) A fully labelled NZ$ Demand / NZ$ Supply graph that shows the effect of the OCR policy change on 14th August.
2) With reference to your graph, explain the effect of the OCR policy change on New Zealand’s exchange rate.
3) Provide at least one citation, correctly formatted using APA (7th Edition).
Part C:
Research and explain why the RBNZ decided to decrease the OCR on 14th August 2024.
This should include the following:
1) Identify whether the drop in OCR on 14th August 2024 was an expansionary (loose) policy or a contractionary (tight) policy.
2) Explain why the RBNZ decided to decrease the OCR on 14th August 2024. Focus your argument on the key economic indicators of inflation, unemployment andeconomic growth leading up to the policy change.
3) Provide at least three citations, correctly formatted using APA (7th Edition).
Part D:
With reference to graphs and using your knowledge of economic concepts explain the possible impact that the recent decrease in the OCR (and further potential decreases in the OCR) may have on New Zealand’s economy.
This should include the following:
1) A fully labelled AD/AS graph to show possible future changes in AS and AD.
2) With reference to your AD/AS graph and exchange rate graph, explain the
possible future impact of further OCR decreases on NZ households and NZ firms (including the overseas market) .
3) With reference to your AD/AS graph, explain the possible future impact of further OCR decreases on unemployment, economic growth and inflation in New Zealand.
4) You are required to explain the impact on both the aggregate demand and aggregate supply.
CONCLUSION
Provide a brief conclusion, to sum up the intention of the essay. Include a brief assessment of the effectiveness of using monetary policy to control New Zealand’s economy.
BIBLIOGRAPHY
Use APA (7th Edition) format for in-text citations and the preparation of your bibliography. Your bibliography should be on a separate page at the end of your essay.
ESSAY PRESENTATION
• Your essay must be prepared using Microsoft Word.
• Your Microsoft Word file name must include your full name: Research Essay (Your Name)
• Headings: Times New Roman or Arial. Use a 14-point font.
• Body of your essay: Times New Roman or Arial. Use a 12-point font.
• Double line spacing throughout your essay.
• Pages should be numbered.
• In-text citations – APA (7th Edition) format.
• Bibliography – APA (7th Edition) format.
WORD COUNT
Not more than 1000 words.
GRAPHS
• Your graphs can be drawn digitally.
• If you draw graphs by hand, you must use a ruler.