The format of the assessment process on modules may change from semester to semester. This may not be the current format for your module. Always check with the relevant module leader what the precise, current format is before you begin to prepare for the assessment on any given module.
All questions carry equal marks.
Explain how a fall in the rate of interest will affect the level of aggregate demand in an economy. The above tables shows unemployment and inflation figures for the UK, 1990-98. Distinguish between the nominal and the real exchange rate. Explain the relevance of this for a government which wants to secure a long run increase in output.