Task 4 This autumn, a state budget for 2022 was presented, which will dampen the activity in the Norwegian economy. a) What is meant by
Task 4 This autumn, a state budget for 2022 was presented, which will dampen the activity in the Norwegian economy. a) What is meant by a budget that dampens activity? b] In what kind of economic situation would you recommend such a budget? Now assume that the ISRR-PK model is known. c) Use the model to analyze the effect of such a budget on GDP, interest rates and ination. You can assume that the economy is in a boom d] Assume that interest rates do exogenous and are given by a horizontal line. How will a subdued state budget affect GDP, interest rates and inflation now
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