Introduction to Economics 2016/7

Introduction to Economics 2016/7 Order Description Answer ALL 6 questions below. The answer to each question should be no more than 250 words long, plus any diagrams you use and the text associated with them (titles, labels, legends, and so on). Thus, the total word count should not exceed 1500 plus diagrams. 1. What is ‘Okun’s Law’? 2. What is the ‘multiplier’ and why is it relevant to fiscal policy? 3. Why does a policy of balancing the budget lead to greater volatility of output? 4. What is the Philips curve? 5. What is inflation targeting? 6. Explain how changes in capital intensity occur, how they affect the production process, and why this matters.