Q3 . As discussed in the lecture, a key variable influencing the discount is expected inflation in light of the $1.9 trillion fiscal stimulus that is being implemented by the Biden administration in the

US. Two eminent economists have different views. Nobel Laureate economist Paul Krugman contends that higher inflation is unlikely.1 On the other hand, eminent economist and former US Treasury Secretary Lawrence Summers, disagrees, claiming "we are seeing the least responsible

macro-economic policy in forty years.2 Summarise in point form the arguments and evidence proposed by Krugman and Summers and

then provide your assessment of who, on balance, is more likely to be right.

You are expected to research the points of view expressed by Krugman and Summers respectively to come up with an answer.

Q4. You may not have time in your tutorial to cover this question, if so, we will revisit in the next one: As discussed in the lecture, a good company does not necessarily make a good investment. Some people say Tesla is over-valued. What measures and/or criteria would you review to determine whether Tesla is over-valued. Note, this question does not ask you whether you think

Tesla is over-valued but what measures/criteria are pertinent to establishing that it is over-valued