1.Assume a government has a balanced budget. What would happen in the bond market if the government imposes expansionary fiscal policy by increasing spending while maintaining existing tax revenues. Explain

2.Explain different tools that a government has to impose fiscal policy. Provide two examples that government of Canada used during the COVID-19 pandemic. You can read more about government actions during the pandemic here https://www.canada.ca/en/department-finance/economic-response-plan.html

3.What is an appropriate monetary policy during the pandemic? Pick a country of your choice and use FRED economic database to support your answer.

4.By referring to the website of the Bank of Canada (https://www.bankofcanada.ca/markets/market-operations-liquidity-provision/covid-19-actions-support-economy-financial-system/) provide two economic policies that the central bank imposed in response to COVID-19. Explain transition mechanism for these policies. By referring to what you learned in the class clearly explain how these policies could change GDP, prices, and unemployment rates in Canada.