Answer this question from Canadian perspective. Assume Canada is at its longrun equilibrium position with equilibrium output
Question:
Answer this question from Canadian perspective. Assume Canada is at its longrun equilibrium position with equilibrium output at full-employment level 0, unemployment at natural rate , and price level at 0. Suppose a strange contagious virus hits Canada (none of the other countries in the world is affected) such that infected people may get really sick and they may die. In order to stop the spread of this virus, all three levels of government enforce social distancing. Canadians are not allowed to travel out of Canada and other countries ban Canadian visitors from entering (but trade flows and financial flows with other countries are not affected). Answer this question based on the theories/concepts/models covered in this course. You must relate every point and curve in your graphs to your step-by-step explanation or a zero will be given. (a) Use properly labeled graphs to help you explain how this virus would affect the equilibrium output, price level, interest rate, exchange rate, trade balance, government budget balance, and unemployment rate in the short run. (b) Use one of the graphs in part (a) to help you explain how the Canadian economy can restore full-employment output on its own without any government or central bank intervention. (c) Use properly labeled graphs to help you explain how Bank of Canada can help to speed up the economy recovery and restore full-employment output. Explain the pros and cons of this kind of central bank intervention.
This is my Final Question, please help me, if not I going to fell :(((