1.If a household has an income of $50 and buys only milk at $3 each unit and honey at $6 each unit, what is the household's budget equation? Explain your answer.

2.Explain how the contractionary monetary policy in the U.S. adds to the global recession. Draw graphs to illustrate the impact of the U.S.'s contractionary monetary policy on the money markets and the goods and services markets in other countries where these governments use the exchange rate policy to peg their currencies to the U.S. dollar.