1. Use the above sources and some limited research to answer the following questions.
a) Based on the article and graphs above what phase of the business cycle do you believe Spain was in during 2013? Explain why with reference to theory and represent this phase of the business cycle using an aggregate demand and supply model.
b) Based on the article and graphs above what phase of the business cycle do you think Spain has entered in 2014? Why? Use your aggregate demand and supply model from part a) to demonstrate what happened to the economy in 2014.
c) Given Spain's most recent unemployment rate, if 17,353,000 people were currently employed how many people would be unemployed?
d) Formulate some brief macroeconomic predictions/forecasts for the Spanish economy for 2015 based on theory, the above article and some of your own limited research.
2. The International Monetary Fund's World Economic Outlook database provides the data in the table for India in 2004, 2005, and 2006.
a) What changes in long-run and short-run aggregate supply and aggregate demand are consistent with these numbers? Demonstrate your answer with a diagram.
b) List two factors that might have produced the changes in aggregate supply and aggregate demand that you have described in your answer to (a).
c) If in 2006 India had an inflationary gap what fiscal policy might be undertaken by the Indian government to address this? Why?
Attachment:- Assignment.pdf