1.Assume that the Vietnam economy is initially in a long-run equilibrium

a. Use the AD-AS and the phillips curve diagram to show the short-run effects on prices (inflation) and output (unemployment) if:

1. There was a removal in trade barriers imposed by Vietnam goverment.
2. The country's trade partner fell into a crisis.
3. The government raised taxes on imported production materials.

2.The banking system has $10 million in reserves, the reserves requirement is 20 percent, and there are no excess reserves. The public holds $5 million in cash. Assume that the government purchases $2 million bonds in open market operation. Calculate the change in money supply resulted from the above policy and shows its effects on interest rates and money quantity in the money market diagram.

3.The banking system has $10 million in reserves, the reserves requirement is 20 percent, and there are no excess reserves. The public holds 20 percent of cash-deposit ratio. Assume that the government purchases $5 million bonds in open market operation. Calculate the change in money supply resulted from the above policy and shows its effects on interest rates and money quantity in the money market diagram.

4.The banking system has $50 million in deposit and $10 million in reserves, and there are no excess reserves. The public holds 10 percent of cash-deposit ratio.. The public holds $5 million in cash. Assume that the government purchases $3 million bonds in open market operation. Calculate the change in money supply resulted from the above policy and shows its effects on interest rates and money quantity in the money market diagram.