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Posted: April 20th, 2022
1. Margaret Thatcher was the Prime Minister of UK from 1979 to 1990.
a. What is the difference between supply side policies and demand management policies?
b. List four supply side policies.
c. Thatcher also used contractionary monetary policy.
i. Using AD-AS diagram show the short-run economic equilibrium with high inflation and high unemployment.
ii. Show the impact of contractionary monetary policy on inflation and unemployment.
2. Evaluate economic conditions in UK during the time period 1975 to 1995 by downloading the data as given in the following table.
Data source: https://databank.worldbank.org/source/world-development-indicators
i. Is there a inflation unemployment trade-off?
ii. Is there evidence for ‘stagflation’?
iii. What are your thoughts on Thatcher Policies?
3.
a. What are the reasons for Japan’s Lost Decade according to the ADB research discussed in the class?
b. Write brief notes on four important reasons on how they contributed to the ‘lost decade.’
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1. Margaret Thatcher served as Prime Minister of the United Kingdom from 1979 to 1990.
a. What is the distinction between supply side and demand management policies?
b. Describe four supply-side policies.
c. Thatcher used contractionary monetary policy as well.
i. Show the short-run economic equilibrium with high inflation and high unemployment using an AD-AS diagram.
ii. Demonstrate how contractionary monetary policy affects inflation and unemployment.
2. Assess economic conditions in the United Kingdom from 1975 to 1995 by downloading the data from the table below.
https://databank.worldbank.org/source/world-development-indicators
i. Is there a trade-off between inflation and unemployment?
Is there evidence of’stagflation?’
iii. How do you feel about Thatcher’s policies?
3.
a. What are the reasons for Japan’s Lost Decade according to
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