__l L l. The former president Donald Trump supported protectionism under his famous political slogan 'Make America Great Again'. In 2018, be imposed tariffs on imported goods (especially on the Chinese products which led to the China-US. trade war). What are the effects on the loanable ftmd market, net capital outow, and foreign currency exchange market in the U.S.? (Domestic country: the US.) a Which side of the economy is affected? Explain why. b. How is it affected (increase or decrease)? c. Identify the new equilibrium and then compare it to the initial equilibrium. What do you expect from this political event? Explain your results. 2. President Joe Biden issued his Buy American Executive 9mm!) January 25, 2021. One of the main purposes of this order is to increase its government purchase on American (domestic) goods to promote the manufacturing sector in the US. Explain short-run and long-run effects on output and price level, assuming policymakers take no follow-up action. (Domestic cormtry: the us.) a. Decide whether the event aects the aggregate demand or aggregate supply. Explain. b. How is it a'ected (increase or decrease)? c. Use AD-AS graph to determine the impact on output and price level in SR. What do you expect om the event? d. On the same graph from above, analyze how the economy moves from its new SR equihbrium to its new LR equilibrium. What do you expect from the event? 3. On May 27, 2021, the Monetary Policy Board of the Bank of Korea decided to leave the Base Rate1 unchanged at 0.50% for the intermeeting period. Many economists, however, anticipate that the BOK will inevitably raise the Base Rate in the near future. (Domestic country: Korea) a. Based on their anticipation, let's assume that the BOK has increased the Base Rate. Use liquidity preference to illustrate in a graph the impact of this policy on the Base Rate. (Hint: change in the Base Rate affects the money supply) b. Use the AD-AS model to illustrate the impact of this change in the Base Rate on output and the price level in the short run. c. When the economy makes the transition from its short run equih'brium to its new long run equilibrium, what will happen to the price level? d. How will this change in price level a'ect the demand for money? Show the effect on the money demand on your graph and discuss the results. I l