ECMC61_Assignment_2_Fall_2011 - ECMC61 LEC 01 and LEC 02...

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ECMC61 – LEC 01 and LEC 02 International Economic: Finance Assignment 2 Due: On or Before Thursday, December 1, 2011, 12:00noon , IC 286 (Note: Assignment submitted after Thursday, December 1, 12:00noon WILL NOT be accepted under ANY circumstance.) Instructions: You can submit individual or group assignment. If you submit group assignment, there should be no more than FIVE students in your group and you just have to submit ONE copy. A title page MUST be attached with your assignment; it MUST include your name(s), student number(s), and your lecture section(s). Staple your assignment (Paper clip is not accepted). A PENALTY OF 10% OF THE TOTAL MARKS WILL BE IMPOSED IF YOU DO NOT HAVE A TITLE PAGE AND/OR STAPLE YOUR ASSIGNEMNT. No late assignment will be accepted under any circumstance. Label your graph; otherwise, marks will be subtracted. Do not write E/q/E e increases/decreases in your answer, you have to answer whether the currency appreciates/depreciates. POINTS WILL BE SUBTRACTED IF YOU DO NOT FOLLOW THIS INSTRUCTION . No credit will be given if you do not show your work. Your answer should be structured in a way such that those know little about economics will have no difficulty understanding your argument/answer. Clearly label the factor(s)/variable(s) that causing the DD and AA curves to shift in your diagram. Total marks: 100 points. Question 1 (15 points) The economy in question is a small open economy with a flexible exchange rate. In response to the recent economic conditions in the country, the policy makers run expansionary monetary policy and contractionary fiscal policy at the same time. However, the market expects these
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This note was uploaded on 12/21/2011 for the course ECONOMICS ECMC61 taught by Professor Dr.irisau during the Fall '11 term at University of Toronto- Toronto.

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ECMC61_Assignment_2_Fall_2011 - ECMC61 LEC 01 and LEC 02...

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