A few months ago, persons were hoping and praying for a vaccine to be developed to fight against Covid 19. The good news is that there is now a vaccine and some countries have approved the use of said vaccine. Assume that governments will have to finance the purchase of the vaccine and that in order to finance the purchase of the vaccine Caribbean governments will have to take a loan from China.

a. Using the IS-LM model, explain the impact of the government spending on vaccine on interest and income.

b. Discuss THREE possible impacts that borrowing from China could have on a

Caribbean country of your choice.