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- COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate. a. Reflecting on the above situation justify whether the State Bank of Pakistan should opt for easy or tight monetary policy as a stabilization policy. Also illustrate it graphically. b. Reflecting on the above situation justify whether the Government of Pakistan should opt for expansionary or contractionary fiscal policy as a stabilization policy. Also illustrate it graphically.Macroeconomic information for an economy is given below. (a) How much productive did labor become from Year 1 to Year 2? (b) What was the inflation rate between Year 1 and Year 2? (c) What was the unemployment rate in Year 1? In Year 2? Please show your work. Year 1 8000 Output (pizzas) Employment (workers) 700 Unemployed (workers) 70 770 Labor force (workers) Price per pizza $8.00 Year 2 9000 800 100 900 $9How does the unemployment rate behave over the business cycle? The unemployment rate _______. A. remains relatively constant over the business cycle at an average of 5.7 percent B. equals 10 percent during a recession and falls to zero during an expansion C. rises during a recession and falls during an expansion D. equals 100 minus the employment-population ratio over the business cycle
- (1) What state of the business cycle is the economycurrently in? Is this influencing your career plans? (2)Have you ever been unemployed (at a time when youwere actively looking for work)? Which of the fourcategories of unemployment would you have fallenunder?COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate. Reflecting on the above situation justify whether the State Bank of Pakistan should opt for easy or tight monetary policy as a stabilization policy. Also illustrate it graphically. 2.Reflecting on the above situation justify whether the Government of Pakistan should opt for expansionary or contractionary fiscal policy as a stabilization policy. Also illustrate it graphically.COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate. Reflecting on the above situation justify whether the State Bank of Pakistan should opt for easy or tight monetary policy as a stabilization policy. Also illustrate it graphically. Reflecting on the above situation justify whether the Government of Pakistan should opt for expansionary or contractionary fiscal policy as a stabilization policy. Also illustrate it graphically.
- Using graphical illustration of AS-AD framework, show the effects of following events on real output and price level in the economy. (A) A wave of immigration increases the labor force. (B) An earthquake destroys some of the capital stock. (C) A technological advance improves the production. (D) The government raises taxes by $100 billion. (E) Government announces an interest rate cut to encourage business investmenOn a business cycle diagram, the trough represents: a. An expansionary phase b. A contractionary phase c. The lowest point of economic activity d. The highest point of growth9. Which of the following are stages of the business cycle? Select all that apply. A. trough B. peak C. stagflation D. valley E. supply shock
- When an economy is operating in a positive output gap (Inflationary Gap) which of the following must be true? a. Unemployment is less than full employment b. Employment is less than full employment c. Employment is equal to full employment d. Unemployment is greater than the Natural rate of Unemploymentneed help with review multiple choice macroeconomic question 24. Newspaper and government sources often cite ‘core’ CPI, a Consumer Price Index that does not include volatile items like gasoline and food. Why is this a misleading measure?(A) It can overstate inflation.(B) It can understate inflation.(C) It misrepresents the volatility of consumer prices. (D) All of the above. 25. Why is the phrase, “Follow the science,” imprecise and misleading?(A) Scientists are mostly a bunch of nerds who do not deadlift.(B) Science is a process of falsification, not a set of dogmas.(C) Scientists have historically stated that smoking is good for health, that Thalido-mide is safe, and that peptic ulcers are caused by spicy foods (instead of H. pylori).(D) It is neither imprecise nor misleading. Always trust scientists.Fundamental causes of a nation's business cycle fluctuations?explain