1. A student claims that "The sales of $1 million worth of locally produced surgical masks has given rise to an income of workers, and the workers will spend some of their income on consumption. Therefore, the GDP contribution (for national income accounting purpose) for this $1 million worth of surgical masks is more than $1 million." Critically comment on this statement. (For simplicity, assume there are no imported intermediate inputs.)
2. Briefly explain the advantages of having a fixed long-run inflation target (such as 2%), which is practiced by many central banks in advanced economies.
3. Briefly explain why the multiplier effect of an increase in government expenditure is smaller after some price adjustments become possible.

Please answer as detailed as possible!! Thanks~~