2. Monetary policy and fiscal policy often change at the same time.

2. Monetary policy and fiscal policy often change at the same time. Suppose the government wants to raise investment but keep output constant. In the IS-LM model, what mix of monetary and fiscal policy will achieve this goal? (Consider a closed economy (no external sector)).
3. Explain why, for Hyman Minsky, a capitalist economy is inherently unstable. In particular, explain the three financial positions discussed by Minsky and what a ‘Minsky Moment’ is.
5. Explain the three steps to analyze a firm’s production. What is the difference between the short run and the long run when a firm is choosing the combination of inputs? Then, explain the following concepts: i. firm; ii. Production technology; iii. Production function; iv. Isoquant; v. Isocost.
7. a. What are ‘returns to scale’? Explain why we may have increasing, constant, or decreasing returns to scale.b. How do we analyze the relationship between the scale of a firm’s operation and its costs? Explain what economies of scale and of scope are.
8. Explain the differences between the following market structures: perfect competition, monopoly, oligopoly, and monopsony.