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- What do you understand by the term “closed economy”? For a closed economy show, National savings = National InvestmentWhat does it mean by "aggregate demand and aggregate supply" when pertaining to macroeconomic policy in an open economy?Please use the AD-AS model to analyze the effects of monetary policy and fiscal policy on economic outcome in an open economy: a. Please show graphically the shifting of the AD curve after the Fed conducts an expansionary monetary policy in a closed economy (A closed economy means there is no international trade.). How do the price level and the real GDP change? b. Suppose the economy becomes an open economy. Please revise the result that you get in part (a). Please explain how you get the new result using the AD-AS model. c. Please show graphically the shifting of the AD curve after the federal government conducts an expansionary fiscal policy in a closed economy. Please show the crowding-out effect. How do the price level and the real GDP change? d. Suppose the economy becomes an open economy. Please revise the result that you get in part (c). Please explain how you get the new result based on the AD-AS model.
- Please explain how wealth destruction works in an economic recession.Determine whether these actions are Monetary Policy or a Fiscal Policy. What are the actions taken by the central banks and IMF to address the existing financial problems?What is the difference between a closed and open economy. Define in a well manner.
- Why could a current account deficit stimulate an economy? List at least two reasons and explain with an example for each.Explain why a large open economy generally does not face a 'trilemma, Is there any case where a large country could lace a trilemma?In your macroeconomic lectures you are often told that exchange rates and interest ratesare important for macroeconomic decision-making.a. How does an increase in Japan’s government budget deficit affect each of thefollowing?
- q2 a.Explain under what circumstances a country can pursue objectives for both economic growth and price stability and where this may be impossible following temporary or permanent supply shocks.Choose TWO of the four macroeconomic objectives studied such as Full employment, Price stability, A high, but sustainable, rate of economic growth. Keeping the balance of payments in equlibrium : State why governments / decision makers try to achieve the TWO macroeconomic objectives Identify key problems which may be encountered when attempting to balance these two objectives Evaluate the macroeconomic measures, employing fiscal and/or monetary policies, which could be taken to balance these two objectives. The structure of your answer to this question should include a brief introduction, main body, and conclusion which summarises your views.By which capital market is basically affected?