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What are the government's fiscal policy options for a recessionary gap caused by cost-push inflation? Use the aggregate demand-aggregate supply model to show the impact of these policies on price level.
Q. Compare currency board to conventional fixed exchange rate? Answer: Currency board mayn't acquire domestic assets and therefore cannot lend currency freely to domesti
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Q. In autarky, Country P was producing at point 5. With trade, could its production point be found above or below point 5? Explain why. What must happen in the K/L intensity ratio
Q. Using the DD - AA framework, show the phenomenon of overshooting. Use a figure to explain when it is taking place. Answer: The figure below illustrates the phenomenon of ov
Q. How did the international monetary system influence macroeconomic policy-making and performance during the gold standard era (1870 - 1914)? Answer: London was the hub of t
Q. Explain how the German Bundesbank gained its low-inflation reputation. Answer: Essentially Germany's experience with hyperinflation in the 1920s and yet again aft
Q. Illustrate why Argentina, one of the world's richest countries at the begning of the twentieth century, has become progressively poorer relative to the industrial countries. [
Q. What explains the sharply divergent long-run growth patterns? Answer: It lies in the political and economic features of developing countries and the way these have
Opportunity cost theory
Concept of human capital
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