Over the past few months, Tropicalian leaders have implemented a policy to boost the Tropicalian economy. As a result, Tropicalian output has grown rapidly, and the Tropicalian tropic has appreciated against most other currencies.

a) Use the DD-AA model to explain what type of policy (fiscal vs monetary) was most likely pursued by Tropicalian leaders. Use a graph to illustrate your answer.

b) Critics of the Tropicalian leadership have argued that, if the policy were implemented permanently, its only effect on output would be to change its composition from export-oriented production to government-oriented production. Are they right? Explain using a new DD-AA graph.