expected to slow to 7 percent this year, according to the International Monetary Fund, from 7.4 percent in 2011 and 9.9 percent in 2010. The article says Mr. Mukherjee proposed such policy package hoping to allow greater foreign investment. Please use the three-panel analysis to analyze the effect of such a policy package and explain in words why Mr. Mukherjee thinks that it can help increase investment overall? (5 point) If we interpret India’s slowing economy as a recession, then please use the AD-AS structure to analyze whether it is a good idea to engage in such deficit reduction policy package and please explain in words. (5 point) Suppose first, the proposed the policy package is the only thing that is going on in the economy, please comment on its impact on the overall price level and unemployment level. Now suppose, in addition, there is a surge in the oil price. Please comment on the additional effect of the oil crisis on the overall price level and unemployment level. (6 point)
expected to slow to 7 percent this year, according to the International Monetary Fund, from 7.4 percent in 2011 and 9.9 percent in 2010. The article says Mr. Mukherjee proposed such policy package hoping to allow greater foreign investment. Please use the three-panel analysis to analyze the effect of such a policy package and explain in words why Mr. Mukherjee thinks that it can help increase investment overall? (5 point) If we interpret India’s slowing economy as a recession, then please use the AD-AS structure to analyze whether it is a good idea to engage in such deficit reduction policy package and please explain in words. (5 point) Suppose first, the proposed the policy package is the only thing that is going on in the economy, please comment on its impact on the overall price level and unemployment level. Now suppose, in addition, there is a surge in the oil price. Please comment on the additional effect of the oil crisis on the overall price level and unemployment level. (6 point)
Econ%201120_2012Spring_prelim2_regular_withanswerkey_April_13.docx