PLEASE THESE QUESTIONS AS ACCURATE AS YOU CAN !!

a) Post WWII, GDP fluctuations in the US were reduced as the size of government increased('size' refers to government expenditure as a percentage of GDP).

1. (i)Is this relationship causal in nature? Why/why not?
2. (ii)Discuss the indirect mechanisms that governments can utilise to help them reduce the overall fluctuations in GDP and thus help stabilise the business cycle.

b) Consider the following fiscal policy changes, namely income and corporation tax increases that the UK government is reportedly contemplating introducing as a way of dealing with increasing debt levels caused by its pandemic response.

(i) Using the full multiplier model, discuss and illustrate the likely short-run effects of these tax policies on the UK economy.

(ii) In order to soften the negative impacts of these policy changes, government is also planning on boosting investment spending at the same time.Using your analysis and illustration from part (i), add in the likely impacts of this relief on the economy, and explain how it might impact on the government budget balance.