answer the question

NaanL
timer Asked: Dec 7th, 2017

Question Description

4. Some macroeconomists believe that Long-Run Aggregate Supply (LRAS) is perfectly inelastic.
a. Explain why they would believe so in 3-4 sentences.
b. If LRAS is perfectly inelastic, what are the implications for monetary policy? Explain in 2-3
sentences.
c. If LRAS is perfectly inelastic, what are the implications for countries considering fixed
exchange rates?
5. On foreign aid to developing countries:
a. What are the circumstances under which foreign aid can help a developing country? Explain
your answer in 3-4 sentences.
b. How can foreign aid harm a developing country? Explain in 3-4 sentences.
c. What are the problems with sending money as foreign aid? Explain in 2-3 sentences.
d. What are the problems with sending goods as foreign aid? Explain in 2-3 sentences. 
6. On international economic development:
a. What do you believe is the key to international economic development, i.e. what is the root
cause of sustainable economic growth in poor countries? (2-3 sentences)
b. What do you believe are the necessary conditions for growth, i.e. what conditions MUST
already exist for growth to occur? (2-3 sentences)
c. How can the U.S. government best promote economic growth in the developing world? (3-4 

sentences)

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