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In this assessment, the following module learning outcomes will be covered:

Explain the behavior of households, firms, and governments in terms of a small set of unifying economic principles

2 Evaluate economic theories and apply them to the analysis of an open economy

3 Utilise data from a variety of sources and work effectively with information technology

4 Assess the effect of policy and other changes on the economy, recognising the basictenants of policy evaluation

5 Utilise a variety of mathematical skills and techniques to analyse the behaviour of small open economies Each question carries equal weight (50 marks) (2000 words)

QUESTION 1

“Expansionary fiscal policies stimulate private consumption and investments”: explain and discuss.

QUESTION 2

Compare and contrast the effectiveness of monetary policy on output under fixed and flexible exchange rates regimes.

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