(i) Critically analyze the short-term and long-term effects of a large budget deficit and public (national) debt. In your answer, provide an explanation of what the public debt is and how it can be financed. You should also critically evaluate the various measures that are usually recommended for reducing a budget deficit and national debt. (This question may be answered in light of the recent events and economic situation in countries such as Greece, Cyprus, Portugal and Spain.)
(ii) Some people (especially economists) argue in favor of international free trade while others favor protectionism. Critically examine who gains and who loses from free trade and protectionism. Overall do you think that international free trade is a good idea?