Macroeconomic Principles

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1000 words Coursework аssignment

Within the сontext described in Chapter 5 of the textbook (Blanchard, Macroeconomics, 2017, International Edition), suppose that the economу is in recession (and as a
result output is too low). Explain how both fiscal and monetary policies⁤ can⁣ be used to restore the equilibrium (Hint: see the discussion in page 119 and use a diagram
in your reply as well).

Based on your previous answer, find, collect, present and analyse data after 2008 from a European country that has used fiscal and monetary policy (or a mix of the
two) to fight recession. Focusing on GDP, unemployment and inflation, explain the extent to which macroeconomic policies helped smooth the recession (Hint: see the
discussion in pages 120-122 from the textbook).

Briefly describe the role of the Credit Rating Agencies (CRAs) for determining the risk premium (see section 6.2 of the textbook). Discuss their role during the euro
zone crisis and the increase in risk premium during this period (Hint: see the discussion in pages 136-137 from the textbook).