17. Illustrate graphically and explain what effect the followings will have on output, exports, imports, net...

 

Transcribed Image Text:

17. Illustrate graphically and explain what effect the followings will have on output, exports, imports, net exports and unemployment. a. An increase in taxes b. An increase in foreign demand c. An increase in government expenditure 18. Suppose policymakers want to increase output and keep net exports the same. Given this information, what type of exchange and/or fiscal policy can be used to achieve simultaneously these two goals? Explain. 19. Suppose policymakers want to increase net exports and keep output the same. Given this information, what type of exchange and/or fiscal policy can be used to achieve simultaneously these two goals? Explain. 20. Suppose a country is experiencing a situation where output is above the full employment level of output and a trade surplus. Further assume that the policymakers' goals are to achieve full employment output and balanced trade. Given this information, what type of exchange and/or fiscal policy can be used to achieve simultaneously these two goals? Explain. 21. Suppose a country is experiencing a situation where output is below the full employment level of output and a trade surplus. Further assume that the policymakers' goals are to achieve full employment output and balanced trade. Given this information, what type of exchange and/or fiscal policy can be used to achieve simultaneously these two goals? Explain. 22. Assume that the exchange rate is allowed to fluctuate freely. Using IS-LM-UIP model, graphically illustrate and explain what effect a monetary contraction will have on the domestic economy. In your graphs, clearly label all curves and equilibria. 23. Assume that the exchange rate is allowed to fluctuate freely. Using IS-LM-IP model, graphically illustrate and explain what effect an increase in foreign government spending will have on the domestic economy. In your graphs, clearly label all curves and equilibria. 17. Illustrate graphically and explain what effect the followings will have on output, exports, imports, net exports and unemployment. a. An increase in taxes b. An increase in foreign demand c. An increase in government expenditure 18. Suppose policymakers want to increase output and keep net exports the same. Given this information, what type of exchange and/or fiscal policy can be used to achieve simultaneously these two goals? Explain. 19. Suppose policymakers want to increase net exports and keep output the same. Given this information, what type of exchange and/or fiscal policy can be used to achieve simultaneously these two goals? Explain. 20. Suppose a country is experiencing a situation where output is above the full employment level of output and a trade surplus. Further assume that the policymakers' goals are to achieve full employment output and balanced trade. Given this information, what type of exchange and/or fiscal policy can be used to achieve simultaneously these two goals? Explain. 21. Suppose a country is experiencing a situation where output is below the full employment level of output and a trade surplus. Further assume that the policymakers' goals are to achieve full employment output and balanced trade. Given this information, what type of exchange and/or fiscal policy can be used to achieve simultaneously these two goals? Explain. 22. Assume that the exchange rate is allowed to fluctuate freely. Using IS-LM-UIP model, graphically illustrate and explain what effect a monetary contraction will have on the domestic economy. In your graphs, clearly label all curves and equilibria. 23. Assume that the exchange rate is allowed to fluctuate freely. Using IS-LM-IP model, graphically illustrate and explain what effect an increase in foreign government spending will have on the domestic economy. In your graphs, clearly label all curves and equilibria.