Question 1. What are the two key approaches used in the new economic growth theories to explain why their theories are different from the established Neoclassical Growth theory. Explain the fundamental determinants of long-term economic growth for an economy

Question 2. Consider the Canadian economy that is in long run equilibrium with output equal to Y*. The United States economy goes into a major slowdown causing a significant decrease in goods and services shipped into the United States from Canada. For the Canada, answer the following questions: What kind of shock occurred- aggregate demand or aggregate supply? Explain answer

Explain the how fiscal policies by government of Canada can be used to drive the economy back towards Y* in the long run.Explain the steps.

Question 3. A review of the economic performance of Canadian economy by economists at the Bank of Canada suggests that the economy has an inflationary output gap.

Explain how the Bank of Canada could use monetary policy instruments to close the inflationary output gap. Explain the process (mechanism) through which this occurs.