Evaluation

Question 1

Evaluate Fiscal policy

Answer 1

Output gap size
consumer/business confidence
time
demand pull
gov budget deficit
size of cut

Question 2

expansionary monetary policy evaluation

Answer 2

demand pull
time
consumer confidence
size of cut

Question 3

contractionary monetary policy evaluation

Answer 3

encourage saving withdrawal
low growth
high unemployment
exchange rate strengthens so CA deficit
reduced investment

Question 4

supply Side policies evaluation

Answer 4

no guarantee of success
time lags
output gap increases
cost
gov budget deficit could increase

Question 5

protectionism

Answer 5

reduces contestbility which drives prices
trade diversion
elasticity
retaliation

Question 6

appreciation

Answer 6

potential CA deficit has imports cheap
high costs cause high unemployment

Question 7

depreciation

Answer 7

higher inflation
reduced purchasing power
reduce investor confidence