1.0 "Corona Virus has caused the world economy into slump.Government and central banks worldwide have taken keen approaches through its fiscal and monetary stimulus measures to counteract the disruptions caused by Corona virus".

With reference to the above, discuss how Fijian government, New Zealand Government and Solomon Island Government have counteracted to the disruptions caused by Corona virus.

2.0 "The neutrality of money theory claims that changes in the money supply affect the prices of goods, services, and wages but not overall economic productivity". Discuss how this statement is true and how it relates to macroeconomics.

3.0 We have an IS-LM Model given below;

C = 175 + 0.25YD

I = 150 + 0.25Y - 1000i

G = 275

T = 200

(M / P)^d= Y - 4000i

(M / P)^s= 800

a)Derive the IS and LM equations(5 marks)

b)Calculate the equilibrium level of income (Y) and the interest rate (i).(4 marks)

4.0 Economy X would like to use a certain combination of capital and labor with the demand variables to determine the quantity output. Based on the below information

Aggregate DemandAggregate SupplyEquilibrium

Y^AD= C + I + GY^AS= A KL^1-Y^R= 0.5Y^AD+ 0.5Y^AS

C = 300 + YDA= (1 + g) A_o

YD = Y^R+ TR - tY^RK = 32.86

TR = 40L = 154.3

G = 130g = 7.5%

I = 100A_o= 100

t = 0.1 = 0.25

Where C is private consumption, YD is disposable income; TR, G and I are transfer payments, government spending and total investment, respectively. A in the index of technology and K and L are capital and labour inputs. A0 is the initial levels of A and L, both assumed to be 100, while g is the growth rates. The MPC is 0.60All figures are in $m except for t, g, and MPC values which are decimals.

Calculate the equilibrium level of income (Y^R) for Economy X.