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QUESTION 20

Macroeconomic Information for Mexico:
2020 Q2 GDP (in 2020 Q2 pesos)    4.97 trillion pesos
2020 Q1 GDP (in 2020 Q1 pesos)    6.09 trillion pesos
2020 Q2 GDP (in 2015 pesos)    3.76 trillion pesos
2020 Q1 GDP (in 2015 pesos)    4.54 trillion pesos

Calculate Mexico’s real GDP growth rate between the first and second quarters of 2020.

(Enter your answer in percent form, rounded to one decimal place, without the percent sign.  For example, if your answer is 0.12345, enter 12.3.)

QUESTION 21

Macroeconomic Information for Mexico:
2020 Q2 GDP (in 2020 Q2 pesos)    4.97 trillion pesos
2020 Q1 GDP (in 2020 Q1 pesos)    6.09 trillion pesos
2020 Q2 GDP (in 2015 pesos)    3.76 trillion pesos
2020 Q1 GDP (in 2015 pesos)    4.54 trillion pesos

Calculate Mexico’s inflation, using the GDP deflator method, between the first and second quarters of 2020.

(Enter your answer in percent form, rounded to one decimal place, without the percent sign.  For example, if your answer is 0.12345, enter 12.3.)

QUESTION 22

Based on your answers from #20 and #21, use the aggregate supply/aggregate demand model to explain what is happening in the Mexican economy.  Your answer should indicate which curve is moving and in what direction, as well as how you know this.

QUESTION 23

Based on your answers from #20 and #21, is Mexico’s short-run aggregate supply curve flat or steep?  How do you know?

QUESTION 24

What fiscal policy do you recommend that Mexico use to resolve the problem you identified in #23?  Be as specific as possible.  Why?