Questions 1. How was the Covid-19 recession different from the Global Financial Crisis, and how were they similar? Compare and contrast the causes of each event and their impacts on aggregate demand and aggregate supply. [6 marks] 2. What does fiscal policy lag mean? Do you think fiscal policy lag is responsible for high inflation today? Justify your answer. [2 marks] 3. What are some of the other reasons for high inflation today? [2 marks] 4. Explain how inflation expectations can become self-fulfilling. [2 marks] 5. As an economic advisor, what would you suggest as the appropriate monetary and fiscal policy stance for dealing with inflation whilst avoiding pushing the economy into recession? Justify your answer. [5 marks] 6. Given that inflation is expected to increase further this year, do you think we are operating on the long-run Phillip's curve? Based on your answer, what do you predict will happen to the unemployment rate in the next 12 months? [3 marks] Clearly explain each of your answers in the text box below