Country A can make two goods, Good F and Good G. For each increase in the production of Good G, it gives up 3 units of Good F.What is the opportunity cost for Country A to produce one unit of Good G?What is the shape of the PPC for Country A? Explain.Suppose Country B produces apples and dish soap. If each time Country B produces another unit of dish soap it costs more and more apples, what law does this illustrate?Using the chart below, answer the following questions:Wristwatches produced in one week Cupcakes produced in one weekCountry X 200 100Country Y 150 50Which country has the absolute advantage in producing cupcakes? Explain.Which country has the comparative advantage in cupcakes? Explain.Country X and Country Y specialize and trade 1 cupcake for 4 wrist watches.Is this trade beneficial for Country X?Is this trade beneficial for Country Y?Draw the diagram for Country A when it is experiencing macroeconomic equilibrium. Be sure to label this correctly.Household indebtedness increases in Country A.What will shift, and in which direction?Draw this on your original diagram.What kind of gap is created?According to classical economists, what will happen in this economy? Explain.The government decides to use fiscal policy. What tools could be used?If the gap is $400 million, and the MPC is 0.5:By how much and in what direction would the government change spending?By how much and in what direction would the government change taxes?Explain what is meant by the MPC of 0.5.

A. Country A can make two goods, Good F and Good G. For each increase in the production of Good G, it gives up 3 units of Good F. i. What is the opportunity cost for Country A to produce one unit of Good G? ii. What is the shape of the PPC for Country A? Explain. iii. Suppose Country B produces apples and dish soap. If each time Country B produces another unit of dish soap it costs more and more apples, what law does this illustrate? B. Using the chart below, answer the following 7:12 1 5G 12 questions: Take Quiz Wristwatches Cupcakes produced in produced in one week one week Country X 200 100 Country Y 150 50 i. Which country has the absolute advantage Question 32 40 pts in producing cupcakes? Explain. ii. Which country has the comparative amplete the following: advantage in cupcakes? Explain. iii. Country X and Country Y specialize and a. Draw the diagram for Country A when it is experiencing macroeconomic trade 1 cupcake for 4 wrist watches. equilibrium. Be sure to label this a. Is this trade beneficial for Country X? correctly. b. Is this trade beneficial for Country Y? b. Household indebtedness increases in Country A. i. What will shift, and in which direction? Upload ii. Draw this on your original diagram. c. What kind of gap is created? d. According to classical economists, what will happen in this economy? Explain. e. The government decides to use fiscal policy. What tools could be used? f. If the gap is $400 million, and the MPC is 0.5: i. By how much and in what direction would the government change spending? ii. By how much and in what direction would the government change taxes? iii. Explain what is meant by the MPC of 0.5