Question: PLEASE ANSWER THESE QUESTIONS !! a)Assume the world is made up of only two countries, namely North and South. Also assume these two countries actively
PLEASE ANSWER THESE QUESTIONS !!
- a)Assume the world is made up of only two countries, namely North and South. Also assume these two countries actively trade with one another, creating an interdependence between them. They are both in a deep recession and both their governments are considering the implementation of fiscal stimulus packages to help boost domestic economic activity.
- (i)What considerations with respect to trade-created interdependence need to be taken into account bya country'sgovernment prior to the implementation of any fiscal stimulus package?
- (ii)Explain how the coordination game reflects the problems faced by policymakers in each country that arise because of their interdependence.
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