5. Compare and contrast how the UK macroeconomy and its policymakers responded to sharp increases in the price of oil in the early 1970s and 2022/3. 6. If the UK were ever to re-join the European Union it might be required to adopt the Euro as its currency. Explain why this might cause similar aggregate demand management problems to those the UK experienced when part of the European Exchange Rate Mechanism. 7. Explain what is meant by the 'Zero Lower Bound' in relation to interest rates and suggest how it might be avoided. 'The LM curve shows points of equilibrium, but the TR curve shows policy responses.' Explain in detail what this statement means. 9. Explain why inflation may tend to accelerate. 8.

5. Compare and contrast how the UK macroeconomy and its policymakers responded to sharp increases in the price of oil in the early 1970s and 2022/3. 6. If the UK were ever to re-join the European Union it might be required to adopt the Euro as its currency. Explain why this might cause similar aggregate demand management problems to those the UK experienced when part of the European Exchange Rate Mechanism. 7. Explain what is meant by the 'Zero Lower Bound' in relation to interest rates and suggest how it might be avoided. 'The LM curve shows points of equilibrium, but the TR curve shows policy responses.' Explain in detail what this statement means. 9. Explain why inflation may tend to accelerate. 8.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter29: Exchange Rates And International Capital Flows

Section: Chapter Questions

Problem 25CTQ: If a countrys currency is expected to appreciate in value, what would you think will be the impact...

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