CSA ECONOMICS OF BUSINESS CHALLENGES :
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ECON 802
THE ECONOMICS OF GLOBAL BUSINESS CHALLENGES
CASE STUDY ANALYSIS # 2
“Critical Thinking about Recession and Standard of Living”
Turnitin Submission as indicated on the Moodle site
NOTE
Title Page: 2 marks
Executive Summary: 8 marks
Statement of the Case Study
The chief economist of your company has requested an evaluation of a recent newspaper article entitled “Recession and Standard of Living.” You have to perform several tasks (indicated below) and deliver a presentation. In the article in question, this is what economics editor of the newspaper wrote about the economy of Country A that suffered a pandemic:
“Economists usually refer to recession as the R-word. During the four quarters of the year 2021 (ending in quarter Q4), real GDP, population, and the real wage declined. The only empirical evidence available for Country A can be seen in Table I. This table shows that thirty million people have left the country due to the pandemic. Clearly things are not going well in the economy of Country A: the growth rate was negative, the national economy was in recession and the standard of living declined dramatically.”
| Quarter | Real GDP | Population |
| Q1 | $10 trillion | 50 million |
| Q2 | $9 trillion | 40 million |
| Q3 | $8 trillion | 30 million |
| Q4 | $7 trillion | 20 million |
Table I
Your Tasks
Task 1 [10 marks]
Using the information provided by Table II calculate the rate of economic growth for the year 2021. Hint: Compare Q4 with Q1, ignoring Q2 and Q3.
Calculations in the Appendix
Task 2 [10 marks]
Using the information provided by Table I, fill in the blanks of Table II.
| Quarter | Real GDP | Real GDP per capita |
| Q1 | $10 trillion | |
| Q2 | $9 trillion | |
| Q3 | $8 trillion | |
| Q4 | $7 trillion |
Table II
Calculations in the Appendix
Task 3 [10 marks]
- What definition of recession does the economics editor use? [5 marks]
- Does the economics editor use the only acceptable definition of recession? If not, what is the alternative definition of recession? [5 marks]
Task 4 [30 marks]
Using the information provided in Table I, discuss whether Country A was in recession in the year 2021.
Calculations in the Appendix
Task 5 [30 marks]
Did the standard of living decline because of people moving abroad? Explain carefully.
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