To answer thefollowing questions, students should use a sum of relevant economic theories

(if require)for the justification of their answers. Students can also use figures (i.e., supply

and demand curves) for presenting their answers.

Consider the financial crisis 2007-2009 in USA.

5.Explain the effect of this crisis on the levels of Americans' consumption in long-run? (2 marks)

6.Explain the effect ofthis crisis on the levels of USA's investment in long-run? (3 marks)

7.Explain the effect of this crisis on USA government's Budget in long-run?(2marks)

8.Assume that you are a policy maker in USA's government and central bank; how you can

recover the crisis by changing macroeconomic variables?(4marks)