Q1. If the production possibilities frontiers shown are each for one day of manufacture subsequently which of the following combinations of coffee and soybeans could Chile and Colombia together make in a given day?
Q2. Suppose that you are the chief economic advisor to the president of the United States. You are asked to propose a strategy to bring the economy out of depression. Joblessness is at 13% and inflation is comparatively low. Your objective is to avoid an increase in inflation and bring the economy to full employment as rapidly as possible.
Applying the principles of the Keynesian model, what specific economic policies would you propose to accomplish these goals? What do you believe would be the short- and long-term effects of your policies on both inflation and unemployment rates? Provide justification and examples to support your conclusions.