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    This document outlines two questions for an economics assignment. Question 1 asks the student to identify the type of inflation an expansionary fiscal policy would create to fight an economic depression in Pakistan, explain its impact on wages, and illustrate the process on a graph. Question 2 asks the student to assume Pakistan's economy is in recession and it implements expansionary fiscal and monetary policies simultaneously without complete crowding out, then explain the effect on aggregate demand, price level, and interest rates in Pakistan.

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    This document outlines two questions for an economics assignment. Question 1 asks the student to identify the type of inflation an expansionary fiscal policy would create to fight an economic depression in Pakistan, explain its impact on wages, and illustrate the process on a graph. Question 2 asks the student to assume Pakistan's economy is in recession and it implements expansionary fiscal and monetary policies simultaneously without complete crowding out, then explain the effect on aggregate demand, price level, and interest rates in Pakistan.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    3 views1 page

    Macro Assignment

    Uploaded by

    ak8ballpool111
    This document outlines two questions for an economics assignment. Question 1 asks the student to identify the type of inflation an expansionary fiscal policy would create to fight an economic depression in Pakistan, explain its impact on wages, and illustrate the process on a graph. Question 2 asks the student to assume Pakistan's economy is in recession and it implements expansionary fiscal and monetary policies simultaneously without complete crowding out, then explain the effect on aggregate demand, price level, and interest rates in Pakistan.

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    © All Rights Reserved
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    Assignment 1

    ( 10 marks)

    QUESTION#1 (5 MARKS)

    The Government of Pakistan opted for expansionary fiscal policy to fight economic depression.
    Identify the type of inflation it is expected to create and its impact on the wages. Illustrate the
    process on the graph.

    QUESTION#2 ( 5 MARKS)

    Assume the Pakistan’s economy is in recession:


    Pakistan implements a combination of expansionary fiscal and monetary policy. In the absence
    of complete crowding out what will be the effect of these policies on each of the following
    1. Aggregate demand in Pakistan
    2. The price level in Pakistan
    3. Interest rates in Pakistan

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