Question
(a)What direction did the 2009 fiscal stimulus package cause the IS curve to shift? After the policy was implemented, did output and unemployment increase? If
(a)What direction did the 2009 fiscal stimulus package cause the IS curve to shift? After the policy was implemented, did output and unemployment increase? If the fiscal stimulus package had not been implemented, would the IS curve have shifted more to the left, or right? Include any citations at the end of your exam paper.
(b)"A decline in autonomous planned investment spending causes the equilibrium level of aggregate output to fall and shifts the LM curve to the right, everything else held constant". Is this statement true or false? Explain your answer.
(c)This question refers to the "P2P Lending at a Crossroads" case study that was assigned reading for Week 10. The case is on the SurreyLearn website. The case describes two P2P business models - the guaranteed return model and the notary model. For each of these business models, describe how information asymmetry problems such as moral hazard and adverse selection may arise, and how the problems can be mitigated. No outside citations are necessary. That is, please restrict your answer to the information provided in the case study.
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