Subject:Economics
Background:
Continued weak demand for steel worldwide since the last recession, has seen global steel prices fall sharply. Meanwhile, China’s economic slowdown has led its producers to look for export markets as their home demand stalls. As a result, UK imports of Chinese steel have increased dramatically. In 2014 the UK imported 687,000 tonnes of steel from China, up from 303,000 tonnes in 2013.
The UK’s steel imports from the rest of the EU are much higher than this, they were 4.7 million tonnes in 2014, but crucially China is selling its steel at much lower prices. Steel imports into the UK from the rest of the EU cost on average 897 euros a tonne in 2014, while Chinese steel imports were just 583 euros a tonne, says the EU’s statistics agency, Eurostat. This has led to accusations that China is selling at unfairly low prices.
EU rules also restrict how much support governments can give to particular industries. Member states may not use public funds to rescue failing steelmakers. However, EU countries are allowed to boost steel firms’ global competitiveness – for instance by funding research and development or helping with high energy bills.
Almost 18,000 people are employed in the steel sector, and some experts say that up to one in four of these jobs could be at risk over the next few years. Earlier this year Tata Steel confirmed a further 1,050 job losses on top of the 1,200 and and October of 2015, respectively. Also in October, the country’s second-largest steel producer, Thai firm SSI, said its Redcar works on Teesside, would go into liquidation with the loss of 2,200 jobs. At the same time, Caparo Industries went into partial administration, putting 1,700 jobs at potential risk.
It is certainly true that China’s dramatic economic growth since liberalisation started in 1979 has been one of the key drivers in the global steel market. It is now the world’s biggest steel producer, accounting for around 822 million tonnes a year. The UK, which produces almost 12 million tonnes a year, is a minor player in terms of absolute output, but has sought to specialise in high-quality, high-value steel products.
With China’s market slowing, their producers have been looking for export markets, such as the EU. This has led to accusations of unfair competition, that Chinese producers are “dumping” steel products on overseas markets – that is not just selling them cheaply, taking advantage of their lower production costs, but actually selling them at a loss. In 2015, the EU imposed anti-dumping duties for six months on some steel imports from China and Taiwan.

Essay title:
In the last few years, high levels of cheap imports have led to a number of closures of steel plants in the UK. To what extent would the use of protectionism to reduce imports of steel from overseas be justified? (100 marks)
Advice:

1) Along with your own ideas, you will need to use and correctly reference secondary sources NB THE REFERENCING MUST INCLUDE HARVARD STYLE IN-TEXT CITATIONS.

2) YOU MUST ALSO INCLUDE A BIBLIOGRAPHY (REFERENCE LIST) and a word count (the bibliography should not be included in the word count).
3) Submission MUST be through Turnitin.

4) Deadlines to be set by your Economics teacher(s).

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6) You may submit an OUTLINE PLAN of your coursework (NOT the entire essay and on no more than one side of A4) to one of your teachers, who will only view and discuss it on one occasion. Your discussion will last no more than 10 minutes.

Monetary and Fiscal Policy, Macroeconomic Fluctuations, and Macroeconomic Equilibrium1. Your Assignment should have a cover sheet with the following information:
? Your Name
? Course Number
? Section Number
? Date
2. You may submit your Assignment using the Unit 9 Assignment template.
3. Your answers should follow the APA format by being in double spaced paragraph format, with
citations to your sources and, at the bottom of your last page, a list of references. Your
answers should also be in Standard English with correct spelling, punctuation, grammar, and
style.
4. Respond to the questions in a thorough manner, providing specific examples of concepts,
topics, definitions, and other elements asked for in the questions. Your paper should be highly
organized, logical, and focused.
5. Required Format:
? Correct APA format for answers (cover sheet with name, course number, section number,
unit number, date, answers double spaced, in Times New Roman 12-point font).
Assignment
This Assignment will assess your knowledge based on the following outcome:
GEL-1.1: Demonstrate college-level communication through the composition of original materials.
As an assistant researcher in economics, your job is to analyze the impacts of the change in fiscal
and monetary policy instruments that accompany the change in economic conditions. When
aggregate demand or short-run aggregate supply curve shifts, it causes fluctuations in output
(GDP). As a result, policymakers sometimes try to offset these AD and AS curve shifts by using
monetary and fiscal policy instruments. With this in mind, address the Assignment questions on
the impacts of monetary and fiscal policies on aggregate demand and short-run macroeconomic
fluctuations. View the Chapter 21: “If It’s Better to have Higher Output and Lower Unemployment,
then Why Doesn’t the Government Use Monetary and Fiscal Policy to Expand Aggregate Demand
as Much as Possible?” video and the Chapter 22: “Is there Any Way to Measure “Expected
Inflation”?” video.
1. Refer to the sets of the aggregate demand, short-run aggregate supply, and long-run aggregate
supply curves. Use the graphs to explain the process and steps by which each of the following
economic scenarios will shift the economy from one long-run macroeconomic equilibrium to
another equilibrium. Under each scenario, elaborate the short-run and long-run effects of the
shifts in the aggregate demand and aggregate supply curves on the aggregate price level and
aggregate output (real GDP).
a. Suppose the household wealth decreases due to a decline in the stock market asset
prices (see the set of graphs below and pay attention to the 3-stage shifts in graphs[5] [6]).
b. Assume the government lowers taxes, which increases the household’s disposable
income. However, the government purchases (spending) remains the same (see the set of
graphs below and shifts in graphs).
2. Suppose the economy of a hypothetical country has reached its long-run macroeconomic
equilibrium when each of the following aggregate demand shocks occurs. What kind of gap,
inflationary or recessionary gap, will the economy face after the AD shock indicated by the shift in
AD curves? What types of fiscal policy instruments will help move the economy back to the
potential level of output (real GDP)? Give specific examples.
a. At the long-run macroeconomic equilibrium, the stock market boom occurs and this
increases the value of stocks households hold (see the set of graphs below and shifts in
graphs in the two-steps).
[ BU204 | Macroeconomics ]
Page 3 of 4
b. The government increases its purchases (spending) due to natural disasters (see the set
of graphs below and shifts in graphs).
c. Assume the Central Bank reduces the money supply in the economy which leads to an
increase in the interest rates (see the set of graphs below and shifts in graphs).
This Assignment deals with how monetary and fiscal policy instruments are utilized to deal with
macroeconomic fluctuations in order to achieve long-run macroeconomic equilibrium through
changing the aggregate demand (AD) and Aggregate Supply (AS) in the economy
Comments from Support Team: I can only send you the link for the videos and the chapter.
http://www.cengage.com/economics/discipline_content/mankiwanswersvideos/ch29.html

http://www.cengage.com/economics/discipline_content/mankiwanswersvideos/ch30.html