Answer BOTH Questions Key Marking criteria will include: • Initiative: Originality, innovativeness of answer • Assignment Structure: Clarity of aims, objective, structure and presentation • Quality of Writing: Readability and ability to convey key message(s) concisely • Quality/Scope of Literature Review: Understanding of established knowledge • Suitability of Literature: Use of suitable sources, focused to answer key research aims • Literature Analysis: Quality/level of analytical skill demonstrated • Insightfulness of Analysis: Interest and usefulness of findings, conclusions drawn • Understanding: Assignment demonstrates students have understood key topics • Consistently appropriate and accurate use of diagrams and mathematical expressions • Clear demonstration of economic interpretation relevant to the assignment • Overall Quality of Assignment Answer BOTH Questions1. Suppose that the economy can be described by a closed-economy IS-LM framework and that isin a recession. Assume that the IS curve is relatively steep while the LM curve is relatively flat. Ifyou were to advise the policymakers on which action to take, what would be your advice? Showgraphically.2. Consider an economy that is characterised by the following set of equations:Cco + ciYDYpY -TIbo + bịYGovernment spending (G) and taxes (T) are constant. Note that investment (1) is proportional tooutput (Y).a) Solve for equilibrium output.b) Using your answer derived in (a) identify and discuss the multiplier. How does the relationbetween investment and output affect the value of the multiplier?c) For the multiplier to be positive what condition must be satisfied?Please note: The two questions are equally weighted in terms of marks. To help explain your answersand analysis, you should always attempt to use diagrams, mathematical demonstration whereapplicable and convey the economic intuitions behind the results. Do not forget to label your graphs.Key Marking criteria will include:• Initiative: Originality, innovativeness of answer• Assignment Structure: Clarity of aims, objective, structure and presentation• Quality of Writing: Readability and ability to convey key message(s) concisely• Quality/Scope of Literature Review: Understanding of established knowledge• Suitability of Literature: Use of suitable sources, focused to answer key research aims• Literature Analysis: Quality/level of analytical skill demonstrated• Insightfulness of Analysis: Interest and usefulness of findings, conclusions drawn• Understanding: Assignment demonstrates students have understood key topics

Answered: 1. Suppose that the economy can be…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter34: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 4CQQ

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Answer BOTH Questions

Key Marking criteria will include:

• Initiative: Originality, innovativeness of answer
• Assignment Structure: Clarity of aims, objective, structure and presentation
• Quality of Writing: Readability and ability to convey key message(s) concisely
• Quality/Scope of Literature Review: Understanding of established knowledge
• Suitability of Literature: Use of suitable sources, focused to answer key research aims
• Literature Analysis: Quality/level of analytical skill demonstrated
• Insightfulness of Analysis: Interest and usefulness of findings, conclusions drawn
• Understanding: Assignment demonstrates students have understood key topics
• Consistently appropriate and accurate use of diagrams and mathematical expressions
• Clear demonstration of economic interpretation relevant to the assignment
• Overall Quality of Assignment

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