Start with reading the long question but they all build off each other
Home Tools P2020 Final Exam... x ECN506_MC_Fina... ? Sign In X T 3 / 6 + 75% 30 Share Search 'Add Text' Instructions for Questions 2 For the question on the following pages, call the initial pre-shock point: A; and call Export PDF the after-shock point: B. I should see (only) points A and B in both the graphs on the left side (where you show the shock on the AE curve on the above graph, and on the Phillips curve on the lower graph: both drawn and labeled carefully). In the first Adobe Export PDF part illustrate the shock described in the question using the AE/PC model without time lags as shown in Ch.12 in the textbook (use the AE and PC graphs similarly to Convert PDF Files to Word the textbook). For your analysis, choose as a starting point (marked A) an economy or Excel Online operating at potential GDP and at its inflation target. Also on the left side show point B where the economy is situated after the shock but prior to any BoE policy Select PDF File response. There should be an A and B on BOTH the upper and lower graphs. If points A and B 2020 Fina...stions.pdf X are the same point then just mark that point with both an A and a B. Using the two graphs on the right side you'll show the Fed policy response. Start on Convert to the right side, showing starting-point B on both the upper and lower graphs. Microsoft Word (*.docx) Indicate where the economy is situated immediately after the described Fed response using a point C. There should be a points B and C on both the upper and lower graphs, even if they Document Language: are in the same location. If the response has a stable outcome (if Y=Y* and/or the English (U.S.) Change economy no longer requires more intervention from the Bank of Canada) then you can stop your analysis there If the economy hasn't stabilized then you should continue showing the dynamic changes. If it's appropriate, you can use a point D to show the final stable position of the economy. You may also want a point E in case point D is still transitory. Convert An important point with respect to timing is that even if the policy response happens in the same time period as a shock, the shock happens first, and then the response follows! The response may or may not neutralize the shock, but that is the sequential order of the two. If the economy returns to its initial long-run equilibrium position then mark either Create PDF C=A or D=A, or E=A, whatever is appropriate for your analysis, so that I can see that you have found that outcome. If the economy doesn't return to its final resting point Edit PDF then I shouldn't see that marking. Note: If you have a letter on the top graph you must indicate the associated position Comment using that letter on the bottom one (so if there is an 'X' on the top graph then there must be an 'X' on the bottom graph. As an example of a common error: if B is located at Y>Y* on the upper graph then it makes no sense to have B at Y=Y* (or Create, edit and sign PDF Y
