I would greatly appreciate help with the following questions that I need to answer for my Econ248 Assignment 2 (Version B)
5. The economy has seen the unemployment rate decrease from 8.56% to 6.15%, the inflation rate increase from 1.4% to 3.2%, and there has been a 17% increase in consumer spending and a22.5% increase in investment spending in the same period.
a) Given the above, what would you predict about the overall direction of the economy? Explain your answer by referring to each of the indicators cited.
b) Describe the fiscal policy that will already be automatically operating, as well as the appropriate discretionary fiscal policy that the government should adopt, given the above situation.
c) Describe the appropriate monetary policy that the Bank of Canada should be operating, given the above situation.
10. Global Insight (GI) forecasting firm predicted that the Canadian economy will bounce back by a stronger than expected 1.0% on annualized basis in the third quarter of 2012 and with a further 0.1% in the fourth quarter of 2012. The firm also expects moderate growth overall in 2013.
a) What evidence does GI present to support the view that Canada had entered a recovery?
b) Use a short-run Phillips curve to explain why the inflation rate may increase over the course of 2012.
c) Under what circumstances might the inflation rate not increase during 2012?
Running head: ECON248 ASSIGNMENT 2 Econ248 Assignment 2
Institution 1 ECON248 ASSIGNMENT 2 2
Econ248 Assignment 2 Question 5:
Based on the various economic indicators, the…