The current Ukraine-Russia War threatens the prosperity of the global economy, and as such, the UK economy. You are working as an Economist for the HM Treasury and a panel of Members of Parliament have asked you to provide guidance on the current situation of the economy and potential demand side and supply side policy interventions to stabilise the economy. Using economic theory, answer the following: a. Discuss how this global event, outlined above, could cause actual growth to deviate away from its potential output in the UK. Why could it be suggested that there maybe longer run impacts to the UK's productive capacity? b. To what extent could deviations in UK real output and the interest rate cause changes in the equilibrium and disequilibrium level of unemployment? c. "Any volatility in output and unemployment because of the War would be due to slow market adjustment. Domestic policymaking should be focussed towards re-correcting any longer run rigidities over short run demand management". Discuss and critique the statement.

The current Ukraine-Russia War threatens the prosperity of the global economy, and as such, the UK economy. You are working as an Economist for the HM Treasury and a panel of Members of Parliament have asked you to provide guidance on the current situation of the economy and potential demand side and supply side policy interventions to stabilise the economy. Using economic theory, answer the following: a. Discuss how this global event, outlined above, could cause actual growth to deviate away from its potential output in the UK. Why could it be suggested that there maybe longer run impacts to the UK's productive capacity? b. To what extent could deviations in UK real output and the interest rate cause changes in the equilibrium and disequilibrium level of unemployment? c. "Any volatility in output and unemployment because of the War would be due to slow market adjustment. Domestic policymaking should be focussed towards re-correcting any longer run rigidities over short run demand management". Discuss and critique the statement.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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