As I am trying to understand the process, NOT just need answers; if you can specify clearly the main transmission mechanisms (e.g., 1 interest rates, so that CI, II, demand curve shift...), that will be very helpful. Label charts clearly so that I can follow your logic. Label intersection points on like charts "A", "B", "C" (or dates, if appropriate) to indicate sequences. Please feel free to draw your graphs and write logical notations in hand, take a photo and upload if that's easier. In 201 1, Hong Kong reported an inflation rate of just over 7%, the highest rate in almost 16 years. GDP was expected to grow by 5% for the full year after expanding by 7.5% in 2010 and contracting 3.3% in 2009. The unemployment rate in 201 1 was 3.3%, down from 5.2 percent at the peak of the crisis in 2009. In 2010, the unemployment rate was 4%, which is considered as the NRU. The Hong Kong dollar is pegged to the US dollar at 7.8:1 and Hong Kong has no controls on inflows or outflows of financial capital. The Hong Kong economy depends greatly on trade with mainland China. a. Using our AS-AD framework, model the trajectory of the Hong Kong economy from 2009 through to 2011. Label 3 points: 2009, 2010 and 201 1. b. During this three-year period, "Chinese Renminbi Nominal FX" appreciated by 7% against the USD. What was the likely impact of such exchange rate movements on Hong Kong's economy from 2009 to the present-expansionary or contractionary? Briefly explain. c. On December 18, 2013, the US Federal Reserve announced its intention to cut back its bond purchasing plan (a.k.a. Fed Tapering). Explain how Fed tapering is expected to influence the yield of Hong Kong government bonds, and the value of its currency (HK$) against Chinese RMB