GDP and the price level in 2020, with and without fiscal policy Question 4 (15%) In 2008, the Irish economy was severely hit by a recession. Professor Morgan Kelly wrote that while house price booms and collapses are common internationally, they are rarely catastrophic. However, Ireland was a peculiar case as its economic growth after 2000 was driven by a property bubble, making its collapse catastrophic. Why can property or housing bubbles have such dramatic effects on the economy? Source: Morgan Kelly, "The Irish credit bubble," UCD Centre for Economic Research, 2009, WP09/32. Question 5: (15%)