If the economy is currently at full employment, at what level should the central bank set the nominal interest rate?   b. At what level should the central bank set the nominal interest rate if the economy is 20% below potential GDP?   c. Explain the difference between the nominal interest rate and the real interest rate. Using these

The economy starts out at full-employment equilibrium. Some events then occur that generate cost-push inflation. Which of the following events might cause cost-push inflation?     A.  a decrease in exports.     B.  an increase in the money wage rate or firms raise prices     C.  an increase in the quantity of money.     D.  a decrease in government expenditure.

1. Currently the prime interest rate, which is the interest rate given to customers with the best credit, in the United States is 3.25% and the inflation rate is 1.3%. a. How much is the real interest rate? b. What will happen to the real interest rate if – all else equal – the inflation rate increases? Provide an example to support your answer. How will the change in the real interest rate from part b, affect the quantity of savings in the United States? How will this change affect the supply of loanable funds. C.

Use the macroeconomic theories explained in the course to write a paper explaining how the Canadian government used a combination of an easy money policy with an expansionary fiscal policy to reduce the negative effects of Covid-19 on the Canadian economy. Why did these policies helped to create the current inflation. Create your own graphs or refer to graphs in your textbook to illustrate your answer.