Subject: macroeconomics

Question 1

If a country's central bank were to engage in stabilization policy using fiscal policy, what would be the response by this country's central bank for the following events and why?

a.The unrest in Iraq has put supplies of oil at risk which pushes its price higher.

b.In UK, income rose an average of 10.5 per cent in the first quarter of the 2018-19 financial year across the top 100 firms.

c.A collapse in share prices in the United States has the potential to cause widespread economic disruption.

d.On March 11, 2019,a devastating 9.0 earthquake struck Japan's east coast, followed minutes later by a massive tsunami with 100-foot waves had caused a massive disaster where 138,000 buildings were destroyed and $360 billion in economic losses were incurred.