1. explain the impact of COVID19 crisis on any economy of the Pacific (of your choice). Discuss specifically its impact on GDP, trade, inflation, employment and business activity. Supplement with the relevant national statistics, where possible.
2. Drive the AD (Aggregate Demand) curve using the following: IS curve is given as Y = 2007-100i, LM₁is Y= 1000+25i (when P = 1) and LM₂is Y= 500+25i (when P =2), . Show the derivation in (interest rate-income) and (price level-income) spaces. (You may insert a snapshot of the graphs if drawn manually).
3. Show using the IS-LM graph the impact of an expansionary fiscal policy if the LM curve is vertical. If you were the Economic Planner in this country, how would you implement the fiscal policy without causing any crowding out of private investment? (You may insert a snapshot of the graph if drawn manually)