One of the main macroeconomic objectives of any country in the world is economic growth as measured by the gross domestic product (GDP) per capita from one year to the other. However, the fast growth rate of the Latvian economy created significant macroeconomic imbalances;.

1. Discuss the costs and benefits for Latvia following the transitioning from a planned to a market economy.

2. Critically evaluate the economic imbalances that Latvia's economy experienced ad recommended the policy options that could have been adopted in order to manage each of them