( Place answers in PowerPoint Key, Save as .pdf, then UPLOAD ) Read the NY Times article (below) on economic shocks in Turkey this year. Use the axes in the answer key to depict in detail a simulation of the goods, money, bond, and foreign exchange markets of the Turkish economy associated with the economic shock outlined in the Times article. Be sure to label each graph, reflecting each market, starting with the market in which the shock occurs on the left. Properly label the axes to reflect the variables associated with each market. Identify the shock to the present equilibrium associated with policy actions enacted by Turkey's newly appointed central banker. Use the model developed in class to determine the expected change in the all basic economic variables of the Turkish economy, resulting from these developments. For questions relating to the foreign exchange market, show your answer in terms of Turkish Lira (TRY) and the US Dollar/ Turkish Lira (TRY) exchange rate. Axes must be clearly labeled and initial and final positions of all variables clearly depicted. Initial positions should be representative of the markets in the originally described state of the Turkish economy. Provide a systematic "1-2-3 bullet point" explanation for the logical dynamics of your answer and indicate all relevant assumptions you derive from information in the article. Assume Turkish Capital Markets are highly mobile

Turkey's President Erdogan has long been a proponent of cutting interest rates to fight inflation and had fired central bank governors who resisted his rate-slashing policies. Following his reelection in May, however, he appointed a new economic team, which has quickly moved to reverse his previous policy of keeping interest rates low. Erdogan appointed Hafize Gaye Erkan as central bank chief and she has led a policy U-turn, vowing to raise rates as high as needed to cool inflation. Turkey has been struggling with huge debts, an inflation rate of just under 40 percent and a declining currency. Under Erkan's tenure, the central bank has hiked its main interest rate from 8.5% to 40%, and bank deposit rates, already above 45%, are expected to rise further by year-end as the central bank takes additional steps to tighten liquidity