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:
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- 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…Read the excerpt below and use it to answer the essay.“In some ways the state of the world economy is less hostile today than when (then) finance minister Tito Mboweni read his Budget Speech a year ago. Global economic growth rebounded significantly in 2021, after the decimation brought about by the Covid-19 induced recession in 2020.One of the outcomes of this was a sharp recovery in commodity prices, which has resulted in much higher-than-expected mining tax revenue in South Africa. This, in turn, has provided some welcome – albeit limited – breathing space on the fiscal front.The local economy is thought to have grown by more than 4.5 percent in 2021 – the highest annual increase in more than a decade. On balance, the finance minister should be able to meet spending demands (including the extension of the Sassa payments) for the year ahead, without widening the Budget deficit or resorting to punitive upwards adjustments to tax rates.”[Adapted from article by Professor André Roux] •…Scenario You are a member of the president's Council of Economic Advisers for the country of Manulo. Currently the economy of Manulo is operating at full employment, but a new crisis has hit the nation of Zedland, a major trade partner. Zedland's unemployment has hit record highs and stock market has crashed unexpectedly. Your team must analyze how this external shock may impact the economy in Manulo. Prepare a brief report that answers the following questions: 1. Which curve, aggregate demand (AD), short run aggregate supply (SRAS) or long run aggregate supply (LRAS) would immediately shift in response to the crisis in Zedland? In which direction (left or right? Explain your rationale. In other words, why does the curve shift? 2. Compare the expected movements in equilibrium GDP and price level in the short run. In other words, compared to the starting point (before the shift) what happened to output and price level (increased, decreased or stayed the same) and after the shift? 3.…
- Using the Aggregate Demand and Supply model, demonstrate the impact on the Korean economy of a set of tariffs imposed by Japan. Explain carefully with theory. Diagram required.Greece was particularly hard hit by the COVID pandemic due to its high dependence on international tourism. Tourism revenue declined by 78% during the first 9 months of 2020. In this context, critically evaluate the following statement: "Greece's membership of the Eurozone constrains its ability to adjust to such a large external shock'.Financial crises and market bubbles are inevitable in the global economy. In this module, we examined some of these financial crises, including: The European banking crisis in 2011 The oil price collapse in 2014 The emerging market turmoil in 2013 The Puerto Rican debt crisis in 2015 The crypto crash in 2018-2019 The COVID-19 pandemic financial crisis While none of these crises matched the scale of the Great Recession of 2008, they still had significant impacts on international markets. To find out about countries' financial information, you can use the resources listed in the Global Financial Information Resources document. Consider the past financial crises and market bubbles. In your discussion, address the following questions: What market indicators can help identify potential global financial crises? What do you anticipate could be the next global financial crisis? How has the global economy responded to the challenges of the COVID-19 pandemic? How do you think the COVID-19…
- "In an economy with a high dependency on imported oil, what is the likely macroeconomic impact of a sustained and significant increase in global oil prices? A) An immediate improvement in the trade balance due to Increased export revenues. B) A decrease in inflation as higher oil prices lead to reduced consumer spending. C) An increase in the general price level and potential deterioration of the trade balance. D) Stabilization of the currency value due to increased demand for domestic currency to purchase oil.which of the monetary or fiscal policy tools do you think can be put in place improving south africa economy during the covid pandemic?Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. Your Policy Brief needs to consider the impacts of the pandemic on economic inequality. To analyse this…
- Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. The Australian Bureau of Statistics (ABS) reports that the household saving ratio in Australia increased…Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. 1) Fiscal policy and managing government budgets Your Policy Brief needs to provide some background…Now that you have developed an understanding of the policy tools that are available to address economic challenges, your task is to prepare material that will go towards a Policy Brief analysing Australia’s economic recovery from the COVID pandemic and building an equitable and resilient economy in the future. Imagine you are now employed as a Graduate Economist working for the Australian Treasury. Your team is responsible for putting together a Policy Brief for the department that summarises some key aspects of the government’s policy responses to the COVID-19 recession and provides policy analysis to strengthen Australia’s economy in the future. You have a very important job! Your task is to provide clear answers to the following queries that have been requested from your department manager, using the knowledge and skills that you have gained from your macroeconomics course. c. In last year’s Budget (2022-23), the previous Australian Treasurer Josh Frydenberg announced that the…