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Please help me in answering and understanding these questions. Thank you! 1) We know that both parties competing for the 2020 New Zealand election promised

Please help me in answering and understanding these questions. Thank you!

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1) We know that both parties competing for the 2020 New Zealand election promised to increase spending on goods and services. We will analyse different aspects of the impact of this policy. (a) What potential impact could the increase in government spending on goods and services have on the international creditworthiness of New Zealand government debt? Why is this the case? (3 marks) (b) What impact(s) will the increased spending by the New Zealand government have on future output? Explain your answer. (4 marks) (c) Would we expect the increase in government spending on goods and services to have a lasting impact on New Zealand income and output? Why or why not? Using a clearly labelled AD-SAS-LAS diagram as part of your answer. (4 marks) (d) Assume that New Zealand has a floating exchange rate. What impact does the increase in government spending have on the current and financial accounts? Use a clearly labelled IS-LM-IP diagram as part of your answer. [Note: assume that the financial account is initially in balance.] (4 marks)

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