Your task is to examine how the United States domestic fiscal and monetary policy might impact on the Asia pacific region, specifically on Australian and Singaporean economies. In your answer consider likely scenarios of US expansionary fiscal and monetary policy on Singaporean and Australian economies. In your assessment of the likely impacts of US policy on Singapore and Australia, use the theoretical tools and concepts developed in the course.

• Consider real interest rate differentials across countries and relative growth rates - what would the intertemporal model predict about capital flows and the current account balances of the three countries. Note; inflation rates and expected inflation rates will be important to consider here also.