During the 2008 crisis, the Eurozone countries applied different strategies to prevent a fall of aggregate demand.
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Question:
- During the 2008 crisis, the Eurozone countries applied different strategies to prevent a fall of aggregate demand.
a. Provide two examples of fiscal policies in face of an economic crisis and discuss their positive and negative effects on aggregate demand. Use the concepts of "multiplier effect" and "crowding-out effect".
2 There is evidence of an increasing protectionism in global trade (US and China trade war), which might cause a fall in global trade.
a. Explain what the expected impact of the fall in international trade on the Eurozone economy might be. Use the AD/AS model. This section must include a written explanation and charts.
Use appropriate graphs and figures to deliver your answers successfully.
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