ln the hypothetical economy of Jamerica, the college graduates of 2018 could hardly have asked for better luck. The unemployment rate dropped to 4.1 % in May 2018- roughly, the lowest level in a generation- and employers were literally scrambling for new hires. Starting salaries rose, many graduating seniors had numerous job offers, and some firms even offered US$10,000- $20,000 bonuses to students who signed the dotted line.

Three years later, the job market for the Class of 2021 was rather different. The economic growth had slowed to a crawl, and then to a halt. Companies that had stocked up on recent college grads in the tighter labour markets of 2016-2018 found themselves with more than they knew what to do with in 2020 and 2021. They were not eager to hire more. Bonuses and other “perks” disappeared; job offers became scarcer. With the unemployment rate around 6% in May and June of 2021, the job market was far from the worst ever. But it was nothing like the glory days of 2018.

(i) Briefly explain and justify what prevailing situation was taking place in the year 2018.

(ii) Identify and explain two (2) fiscal policies and two (2) monetary policies that the government of Jamaica could have implemented to correct this situation in 2018.

(iii) Use a diagram to illustrate the correction measures.

(iv) Briefly explain and justify what prevailing situation was taking place in the year 2021.

(v) Identify and explain two (2) fiscal policies and two (2) monetary policies that the government of Jamaica could have implemented to correct this situation in 2021.

(vi) Use a diagram to illustrate the correction measures.

(vii) As the Economist in this country, explain one other measure you can use to improve and keep this economy sustainable. Justify your response.