Answer to Question #4217 in Macroeconomics for akash

Question

1. Consider a macro economy initially in equilibrium but not at full employment. & Using an aggregate demand and aggregate supply diagram model of the economy, graphically illustrate and discuss the short-run and long-run effects of the following events upon the economy:
(a) An increase in international oil prices.
(b) An appreciation in the foreign exchange rate value of the economy’s currency.
(c) The American economy falls back into recession
(d) The country’s main exports fall in price while the goods the country imports from abroad rise in price & & & & & &


& 3. Collect an article from an Australian newspaper showing coverage of some macroeconomic issue. Explain the choice behind the article and what macroeconomic concept it is displaying (1 Mark)


10. Why under flexible exchange rates does a nation not have too worry too much about a balance of payments deficit? What other specific advantages do flexible exchange rates give to the operation of economic policy with specific regard to effectiveness&

Answer 1

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