1. Explain the sectoral balances approach to macroeconomic analysis and how they are related and why. (3 marks) 2. During a pandemic, private sector financial behaviour becomes more risk-averse would like to move into surplus. Suppose that the foreign sector also runs a surplus. What does this imply for the government financial balance? Under what circumstances is it possible for a country to run a government surplus and a domestic private sector surplus at the same time? (2 marks) 3. Explain Hyman Minsky's Financial Instability Hypothesis, using a balance sheet approach. How can stability breed instability, according to Minsky