Answer questions 1 and 2 (a, b, c, d)

1. Which of the following is regarded by many economists as the major cause of the nancial crisis of 2008 and the subsequent recession in many countries? (1) A. The interaction of the multiplier and accelerator B. Excessive growth in credit and levels of debt C. A negative supply-side shock D. Government policy on taxation 2. Using an AD+AS diagram explain the following key benets and costs of (short term) economic growth for an economy: Diagram (3) a. Lower unemployment (2) \f(1. Higher living standards and lower poverty (include education and healthcare in your answer) (6)