Question $1$:

a$.[1$ point$]$ Does the country in the above graph have an unemployment or an inflation problem?

b$.[1$ point$]$ What fiscal policy action would you advise the government to take to fix the problem in $($a$)?$

c$.[1$ point$]$ What will be the impact of this policy action on aggregate demand and$/$or aggregate supply curves in the picture? How will the real GDP and price level respond to the policy change?

Question $2$: $[1$ point$]$ Suppose that there is an increase in government spending of $\backslash (\backslash$$ $400\backslash )$ billion, and that the government spending multiplier is $2.$ What would be the value of the change in the real GDP$?$

Question $3$: $[1$ point$]$ Suppose that there is an increase in taxes of $\backslash (\backslash$$ $100\backslash )$ billion, and that the tax multiplier is $-4.$ What would be the value of the change in the real GDP$?$

Question $4$: $[1$ point$]$ Suppose that a change in tax policy is needed to increase real GDP by $\backslash (\backslash$$ $300\backslash )$ billion. If the tax multiplier for this economy is $-3,$ what must be the size of the necessary tax change?

Question $5$: $[2$ point$]$ Go to google.com and type "usd peso" in the search bar. You should get the value of the most recent rate with clearly specified units and a graph showing historical values for the rate. The default is $1$ month. Note the units of the exchange rate in the graph and make sure they read pesos per usd. Write down two values of the exchange rate for two dates that are $1$ month apart. Question $6$:

a$)[1$ point$]$ Suppose a camera sells for $800$ Canadian dollars in Canada. The same camera costs $\backslash (\backslash$$ $700\backslash )$ at Best Buy in the US$.$ If the exchange rate is $1\mathrm{.}25$ Canadian dollar per US dollar, what is the USD value of the camera's price in Canada when converted to US dollars? Does the law of one price hold?

b$)[1$ point$]$ If the exchange rate changed to $1\mathrm{.}10$ Canadian dollars per USD, is this an appreciation or depreciation of the US dollar? How would the USD price of the Canadian camera be affected by this change $($redo your calculation from part a$)?$