Question 5:

1.Crown Prince Hamdan Bin Mohammed announced on Wednesday that Dubai has agreed a fifth economic stimulus package to support businesses hit by the ongoing coronavirus pandemic. In a tweet, he said an extra AED317 million ($86.3 million) was being allocated to bring the total stimulus package to AED7.1 billion. "We continue to implement all necessary to enhance the ability of all sectors to overcome the effects of the global crisis," Sheikh Hamdan tweeted. He added: "Despite the challenges posed by the pandemic in the world, our economic situation is constantly improving, and we have the ingredients that enhance our ability to achieve leadership, and this was reflected in the rapid pace of recovery of various sectors and economic activities." (6^th Jan 2021, Khaleej Times)

In a press release, The Central Bank of the UAE (CBUAE) has announced the extension of the applicability period of the key components of its economic stimulus package, the Targeted Economic Support Scheme (TESS) until 30 June 2021. The TESS was launched by the CBUAE in March 2020 to support the UAE's economy during the COVID-19 pandemic, through a range of integrated relief measures to the banking sector related to funding, liquidity, lending and capital.

Explain the impact of these Fiscal and Monetary policies on national income and interest rate using IS and LM framework? Please draw an appropriate diagram to explain the impact of these policies on National income.