Hi I need help with the following microeconomic questions:
2. How does monetary policy affect the share market?
3a. Referring to the above graph: Given that the economy has moved from A to B what would be the appropriate fiscal policy to achieve potential GDP and why?
3b. Referring to the above graph: If fiscal policy is successful at moving the economy from point B to equilibrium at potential GDP, what happens to unemployment and what impact will this have on the government’s budget?
Please note there are 4 questions!
- Attachment 1
- Attachment 2