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- a) Why can't the government run a budget deficit in a one- period macroeconomic model? b) Why are government transfer payments not included in (expenditure-based) GDP?what are implications for sectoral balances under the heterodox/mmt and new classical approaches?What are the effects of Brexit on logistics activities on a domestic scale and global scale?
- (iii)Explain what is meant by the current account multiplier in relation to a fiscal expansion, giving the appropriate equation.Solve the national-income model Y = C + lo + Go C = 160 + 0.55Y – 0.004Y² | Go = 0.25 Y %D where Io = 40 dan To 140. Does the government incur a budget surplus or a budget deficit according to this model?Do the existence of SIFIs represent a threat to the ecnomic stability of the country? Why or why not? Explain how the post great-recession regulations tried to deal with this issue.
- (a) Using the appropriate graphs, consider the short run impact of a natural disaster that causes a sudden drop in the capital stock using a real intertemporal model with investment (i.e., the simple intertemporal model without money). Explain the impact on wages, interest rates and investment. Does the model provide an unambiguous prediction for the impact of the disaster on hours worked and short-term output? Why or why not?Scenario You are a member of the president's Council of Economic Advisers for the country of Manulo. Currently the economy of Manulo is feeling the impacts of the crisis in the nation of Zedland, a major trade partner. Manulo's GDP is currently at $300b and is estimates show that Manulo's economy has the capacity to produce $360b. As a nation Manulo has a Marginal Propensity to Save of 10%, has zero national debt, and its most recent government budget was balanced. Prepare a brief report that answers the following questions: 1. Based on what you explained previously (scenario 4) about short run vs long equilibrium, the president favors immediate action, and wants you put together a fiscal policy response. Which fiscal policy action would you recommend (expansionary or contractionary)? Explain your rationale with words. 2. The president wants to use government spending, rather than taxes, to close the output gap in the economy. The output gap refers to the difference between the…Brexit and Covid-19 restrictions may result in a recession. How can the UK government and Bank of England fix this with both fiscal and monetary policy?
- Do the existence of SIFIs represent a threat to the economic stability of the country? Why or why not? Explain how the post great-recession regulations tried to deal with this issue.What does it mean when someone says that "High debt usage by corporations drives up the riskiness of our country’s economic base"?ent40.docx Name: Problem #6: Economist As an economist for the Canadian government, you need to ensure that our dollar is strong enough to continue buying what we need. After gathering your information, you start doing your work. The Canadian dollar loses approximately 2.3% of its buying power each year due to inflation. Inflation refers to the decline of purchasing power for a given currency over time. a) If the inflation rate of 2.3% continues each year, what will be the buying power of today's Canadian dollar five years from now? Format your answer in dollars! b) The government decides to use this model to forecast what their dollar will be worth over the next 15 years. Is this model effective? Are there any limitations or issues with doing this?