Answer the questions using theories from macroeconomics and real life examples(need around 1500)

1. "Discretionary fiscal policy should not be used in an economic downturn, because this will lead to tax rises and spending cuts in the future that will damage economic growth." Discuss. (30 marks)

2. Considering the monetary and fiscal policies announced or implemented in the UK in 2022 to combat inflation, you are required to employ relevant theories and concepts in open macroeconomics to discuss

a) causes of inflation, and

b) these introduced policies, (35 marks)

3. Demonstrate, using the 3-equation model, how the policies discussed in 'b' above will impact (or have impacted) the UK economy? (Hint: policy makers assume a large negative demand shock) (35 marks)