Question: 2. Using the dynamic model we developed in class answer the following questions: a) Using a graph and your own words explain how an expansive

2. Using the dynamic model we developed in class answer the

2. Using the dynamic model we developed in class answer the following questions: a) Using a graph and your own words explain how an expansive fiscal policy is going to affect an economy that is initially in full employment. Describe the dynamic evolution of the main variables in this economy. b) Explain the version of the Phillips curve in this model, and the formation of expectations with regards to inflation. Remember that the Phillips Curve is: t=Et1t+(YtYt)+t c) Explain the Fisher Equation. What is the role that it has in this dynamic model

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