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As you are aware, the United Kingdom, as well as other countries, is facing a severe health crisis due to the Covid-19 pandemic. The Bank
As you are aware, the United Kingdom, as well as other countries, is facing a severe health crisis due to the Covid-19 pandemic. The Bank of England has responded by decreasing interest rates and the Treasury has announced an expansionary fiscal policy in the new budget.
What type of shock is Covid-19 for the UK economy? [5 points]
Discuss if these were the appropriate responses in the frameworks you studied, having also in mind the interactions between fiscal and monetary policy. [10 points]
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