Reference no: EM13684

Question 1:

Consider a government uses an expansionary fiscal policy to get out of a recession. Use the IS/LM model and the IS-PC-MR model to illutrate what monetary policy to pursue. 

Question 2:

Suppose an economy, in which technological capabilities become obsolete. Use the Solow-Swan model and the knowledge spillover model to illutrate how its productivity growth rate dependence on capital changes over time.

Question 3:

Suppose an economy with high innovative potential, but where saving is insufficient to fund innovative investments. Use Garrison's capital-based macroeconomics to illustrate how more funding to innovative investments and thereby higher sustainable growth can be obtained.

Question 4:

Consider home cost pricing prevails in international trade, while world output is declining. Consider two economies, A and B, both having floating exchange rates and the same monetary policy regime; the only difference being that the wage costs of economy A increase relative to those of economy B. How will the Mundell-Fleming model be used to illutrate what happens to the trade balance and output of these two economies.