please answer question C either choose c1 or C2

(iii) What are likely responses by the Central Bank to these changes? Discuss haw the central bank and the treasury (ministry of finance) could respond by adjusting monetary and/or scal policies when facing such mass automation challenge (5 points). C2(i). What does the term 'creative destruction' mean? In a Schumpeterian growth model, what determines the growth rate of productivity? How does this compare to the mechanism driving growth in the Solow model with technological progress? (18 marks) CZtii). For each question. identify the statement as True or False. You will receive 1 mark for correctly identifying the statement as True or False (please circle the correct answer) and 3 marks for an explanation of your answer. You may use verbal or diagrammatic explanation as appropriate. Please note explanations should not exceed 5 lines. CZliia). When we add rational expectations to the 3-equation model, the predictions of the model changes. (4 marks) True or False? Briey expiain your answer. 02(ii.b). There is no difference between Tobin's q theory of investment and permanent income hypothesis (PIH). (4 marks) True False C2(ii.c) The IS curve becomes atter with a fall in the marginal tax rate that decreases the size of the multiplier. (4 marks) True False inB Mr B (i) Following exit from the EU single market, assuming the UK decides to trade only among the four nations (i.e., without rest of the world). How will the shocks listed in 'a-e' below affect the UK's (i.1) equilibrium level of output, (i2) unemployment, (t3) the IS curve and (L4) the exchange rate (XR) curve (a) stock market boom (4 marks) (b) a fall in the retirement age (4 marks) (c) a decrease in depreciation rate (4 marks) (d) a natural disaster that wipes-off stock of capital (4 marks) (e) an increase in the rate of technological progress (4 marks) (ii) If we relax earlier assumption, and now assume that the UK is a small open economy. demonstrate using the 3-equation model the adjustment to equilibrium of a permanent shock to aggregate demand (10 marks) Section C (30 marks). Please answer either question C1 or CZ. c1. In a country with a small open economy, government has ordered a mass domestic introduction of fully automatic retail and teller machines in all shops/supermarkets for consumers to reduce human contact during pandemic. All displaced shop assistances and cashiers have received 6-month wages and free retraining programs supported by the government and get employment in other sectors. Imagine that the cost of such technology has been reduced considerably, while quality is improved. i.Using 3-equation macroeconomic model for Open economy with labour market, draw a relevant diagram and explain the likely possible effects of these automation technology and the government measures on the key macroeconomic indicators. Clearly state your assumptions and explain any shifts in your diagram (10 points). ii.Explain your economic arguments. and identify likely short-term macroeconomic impacts of this mass automation technology and government measures on: (a) the labour market equilibrium (3 points), (b) private investment (3 points), (c) real exchange rate (3 points). (d) output (3 points) (e) inflation (3 points)