What specific theory (model) do economists use to determine Gross National Product (GDP) and the average price level? Applying this model, how do economists use Monetary and Fiscal Policy to bring the economy to a desired level of GDP?

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Instructions
This is a take-home, open-book assignment. Each student has one week to upload their work to Chalk & Wire AND Canvas. Multiple uploads are allowed, but only the last dated successful upload will be accepted. The final submission should be between 500 and 800 words, excluding references. Each student must complete their work independently, without collaboration or consultation with anyone, in any format. Proper citation is expected when other people’s work is mentioned.

In your answer you should identify and define in detail multiple theories. You should explain in detail how these theories are applied in the discipline of this course. You should provide detailed examples to illustrate how the theories can be applied. Please do NOT put your name on your document.

Writing Prompt

The study of Macroeconomics involves the analysis of economic activity at the aggregate level. Topics include the measurement and determination of national output, total spending, the level of employment, the average price level, interest rates and the forces contributing to their change over time. What specific theory (model) do economists use to determine Gross National Product (GDP) and the average price level (e.g., Consumer Price Level or CPI)? Applying this model, how do economists use Monetary and Fiscal Policy to bring the economy to a desired level of GDP? Provide specific examples to illustrate your points.