8. What do you think is the best policy the government can taker to restore output level at the full employment level. Discuss

9. Suppose upon graduation, you land a job that pays you TK 60,000/month, including two festival bonuses (each being 50% of your monthly salary) per year. Giving a detailed breakdown, how much should you pay in taxes?

10. Explain the Laffer curve and denote the optimal tax rate.

1. The economy is in the short-run equilibrium, at the point given below: Price level = 130, SR QD = 4 trillion, SR QS = 4 trillion (LRAS = 4.3 trillion). Consider the Classical economy for this question. Using appropriate graphs, explain the impact of the economy in the long-run equilibrium.

2. a. Now consider Keynesian economy. Using details from Q (1), should the govt increase/decrease expenditure? By how much, given MPS = 0.4.

b. Now consider the presence of the crowding-out effect along with the effects from part (a). Using the information in part (a), what is your new answer.