Below is data for the hypothetical country of Basketcaseia:
Basketcaseia’s Macroeconomic variables, 2010 and 2012 2010 2012 GDP growth rate % 11.2 -10.2 Unemployment % 2.3 5.5 Inflation % 5.8 9.2 Current Account (% GDP) -8.5 12.7 Exports (% GDP) 34.1 58.6 $bask (Per $ US) 25.58 41.35 Investment (% GDP) 41.4 20.3 Budget balance (% GDP) 4.6 -7.7
(a) What was the main problem facing Basketcaseia in 2012? Why?
(b) Describe the changes in each of these eight macroeconomic variables
between 2010 and 2012. What are the implications of each?
(c) Explain the changes in any four of these macroeconomic variables between
2010 and 2012.
(d) What policy options do you recommend to improve economic outcomes?
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