Answer Happy

Question 5 (10 marks) You are an economist at the Finance Ministry of your country. The government has just received information on this day (27 April 2022) that the economy grew by 2.2% in Q4 2021 (i.e. October- December 2021). Information on the most recent quarter (Q1 2022) covering the period January- March 2022 is still unavailable. You have been given two tasks by your supervisor regarding the matter above. First, you have been tasked with putting forward a brief whereby you propose using a suitable component of GDP to contract economic growth using the smallest amount of financial resources available. Using your knowledge of multipliers, what would your advice be, both mathematically and argumentatively? Compare and contrast with the alternative available. Second, your supervisor wants your opinion on any concerns you may have regarding the government's plan to run contractionary fiscal policy to counteract this economic boom. State two concerns and briefly explain them.