Can you please solve all the questions? Do not touch if you are going to solve only one question accordingly to guideline. Thank you in advance! 6) In 1990's several Latin American countries needed to increase their interest rate to get foreign financial capital flow into their countries,due to the low foreign reserves. Ignore the international economics aspect of this policy. Write what will be affect of this policy on the economy, assuming when this policy was implemented economy was in equilibrium. 7) There are several views on how governments should manage their budget.Write which view you find most appropriate and explain your answer.(Again you don't need to know all technical details. Base your evaluation on what you have learned in the relevant chapter(s) of this course) 8) In early and mid 1990's,economists argued that the Turkish government created artificial demand inflation. Describe the way AD, SRAS and short-run equilibrium points should have changed in Turkey in the 1990s,while the developments I have described above were occurring.How will the Turkish economy would return to equilibrium in the long run, if government did not take any further actions? Explain your answer. 9)Describe and briefly evaluate (share your opinion, and relate it to your description) the inflation targeting principle as a policy to regulate economy. 10) Compare fiscal and monetary policies as tool to create short run stabilization.Write one adventage of one of these policies compared with other.Explain vour answer.
