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Eco365  International Monetary Economics

1. Find a recent (September 2021‐Dec. 2021) international finance related article in the media (the Economist, Globe and Mail, National Post, New York Times, etc.), and attempt to explain parts or all of it using the tools we learned in class. Highlight the sentences that you analyze, and hand in the article along with your work. Use written and graphical explanations. (approximately 3 double spaced pages; 20 marks)

2.  Explain why price levels are lower in poorer countries. (approx. 2 double spaced pages; 10 marks)

3. Using a figure and a written explanation, show that under full employment, a temporary fiscal expansion would increase output (over‐employment) but cannot increase output in the long run. (approx. 2 double spaced pages; 10 marks)

4. If the central bank does not purchase foreign assets when output increases but instead holds the money stock constant, can it still keep the exchange rate fixed at ? Please explain showing a written and graphical explanation. (approx. 2 double spaced pages; 10 marks)

5. Of the Government Safeguards Against Financial Stability discussed in Chapter 20, which of these was weakest and as a result contributed to the 2007‐2009 U.S. Financial Crisis? (approx. 2 double spaced pages; 10 marks)