Introduction In this Module we constructed a full-blown macroeconomic model! This is the kind of framework that professionals in government, banking & Finance, and analysts consider when discussing and presenting their forecasts and views about the economy to the public, The Business Cycle Model explicitly accounts for inflation and the Central Bank in addition to the key spending channels of the economy: households, forms, government, and our purchases/sales from/to the rest of the world. The model allows also for different horizons of analysis: the short, the middle and the long-run as the economy transitions to its equilibrium. Instructions For this assignment, we are going to turn the tables. You have to write an "exam question in which you would provide the setting or scenario and then using the Business Cycle Model, the "students' would have to analyze and predict the outcome of the situation. Your "exam question most come with an answer key" with graphs that illustrate the economy's dynamics. Here is a sketch of the exercise. - The economy starts at the steady state - Then event 'X' happens (event 'X' can be anything that shifts C. I. G, or net exports) - Illustrate how the economy moves to a new short-term position Illustrate how the economy transitions to its new equilibrium in the middle-run - Illustrate the economy's end position in the long-run - For each of these phases you have to tell what happens to: C, G, net exports. Inflation, interest rates, and to the exchange rate. Your "answer key" shall show in clean fashion all of the above Your "exam question will count for 25 points, the "answer key" for 50, remaining 25 will be given for congruence between the graphs and your predictions. Your file has to be uploaded to CANVAS in PDF format Introduction In this Module we constructed a full-blown macroeconomic model! This is the kind of framework that professionals in government, banking & Finance, and analysts consider when discussing and presenting their forecasts and views about the economy to the public, The Business Cycle Model explicitly accounts for inflation and the Central Bank in addition to the key spending channels of the economy: households, forms, government, and our purchases/sales from/to the rest of the world. The model allows also for different horizons of analysis: the short, the middle and the long-run as the economy transitions to its equilibrium. Instructions For this assignment, we are going to turn the tables. You have to write an "exam question in which you would provide the setting or scenario and then using the Business Cycle Model, the "students' would have to analyze and predict the outcome of the situation. Your "exam question most come with an answer key" with graphs that illustrate the economy's dynamics. Here is a sketch of the exercise. - The economy starts at the steady state - Then event 'X' happens (event 'X' can be anything that shifts C. I. G, or net exports) - Illustrate how the economy moves to a new short-term position Illustrate how the economy transitions to its new equilibrium in the middle-run - Illustrate the economy's end position in the long-run - For each of these phases you have to tell what happens to: C, G, net exports. Inflation, interest rates, and to the exchange rate. Your "answer key" shall show in clean fashion all of the above Your "exam question will count for 25 points, the "answer key" for 50, remaining 25 will be given for congruence between the graphs and your predictions. Your file has to be uploaded to CANVAS in PDF format