Intermediate Macroeconomics Questions

Every mark = 1point/fact. Thank you.

Question 1 (a)

Monetary policy and fiscal policy both affect investment, particularly business fixed investment, and housing investment. Discuss. (6 marks)

Question 1 (b)

Show graphically, the short-run and long-run effect of a monetary policy expansion when both exchange rates and prices are flexible, and capital is perfectly mobile. What happens during the period of adjustment from the short to the long run? (10 marks)

(Please show graph and explain the theory from graph too)

Question 1 (c)

What are the short-and long-term volume effects of an exchange depreciation? (4 marks)

Syllabus from:

Main References:

Dornbush, R., Fisher, S. and Startz, R. (2018). Macroeconomics. 13th Edition, New York: McGraw Hill.

Additional References:

Blanchard, O. & Johnson, D.R. (2013). Macroeconomics. 6th Edition, Essex: Pearson Education Limited.

Gordon, R. J. (2012). Macroeconomics. 12th Edition, Boston: Pearson-Addison Wesley.

Mishkin, F.S. (2012). Macroeconomics: Policies and Practices. Global Edition, Essex: Pearson Education Limited.