Effect of interest rate reduction in philippineeconomy

Reference no: EM133289254

Assignment:

After the typhoon Haiyan devastation the Philippine economy experienced a recession during the period 2020-2021. Answer the following questions:

(a) Suppose the Philippine Reserve Bank reduced interest rates in order to reduce the severity of the recession on the economy. Examine the effect of interest rate reduction in the Philippineeconomy.

(b) "The cost of rebuilding the Philippinesafter typhoon Haiyan could reach USD5.8bn", a senior official has said. Assume the government of Australia Department of Foreign Affairs and Trade provided a grant of USD 5.8 billion. Also assume that despite the hardships the Philippine families experienced, 15% was the beneficiary savings from the Australian grant. Further, assume all other factors remain constant.

(i) Calculate the total effect of the spending multiplier of the Australian government grant on the Philippine economy GDP growth.

(ii) Examine the overall multiplier effect of the USD5.8 billion grant on the Philippine economy.

Reference no: EM133289254

Questions Cloud

How does total amount of deposits in banking system increase : By how much does the total amount of deposits in the banking system increase? By how much does the money supply increase?

Case scenario of graduating in a deep recession : What can you do to be ready for the worst case scenario of graduating in a deep recession (with high unemployment and a big surplus of labor)?

How can the decision of us citizens to save money : How and why can the decision of U.S. citizens to save money cause economic problems for the economy?

Types of goods into normal goods-inferior goods : New cars, used cars, rental cars - classify these 3 types of goods into normal goods, inferior goods, and luxury goods?

Effect of interest rate reduction in philippineeconomy : Suppose the Philippine Reserve Bank reduced interest rates in order to reduce the severity of the recession on the economy.

Examine decision by the victorian department of transport : Examine the factors that could have contributed to the decision by the Victorian Department of Transport to reject Singh.

Discuss the real exchange rate of finland : The external value of the euro is exogenous from the point of view of Finland and it appreciates in the foreign exchange market by 5%.

Compare perfectly competition with monopolistic competition : Explain whether a firm in monopolistic competition can achieve allocative and productive efficiency.

Role of macroeconomics in poverty alleviation : Macroeconomics is the study of the economy as a whole. It looks at the big picture of how the economy works and how it affects people.

User Account

All Pages