Fiscal and Monetary Policy scenarios. For each scenario explain the standard Keynesian recommendations for fiscal and monetary policy. Mention both tools of fiscal policy and all 4 instruments of monetary policy. Don't just use the abbreviations - write out the name of each tool at least once. a. Scenario a: the unemployment rate rises to 12%, real GDP is falling 4% per year and inflation is at 1%. Fiscal Policy recommendation: Monetary Policy recommendation: a. Scenario b: unemployment rate falls to 3%, real GDP is rising at 5% per year and inflation is at 8%. Fiscal Policy recommendation: Monetary Policy recommendation:

Fiscal and Monetary Policy scenarios. For each scenario explain the standard Keynesian recommendations for fiscal and monetary policy. Mention both tools of fiscal policy and all 4 instruments of monetary policy. Don't just use the abbreviations - write out the name of each tool at least once. a. Scenario a: the unemployment rate rises to 12%, real GDP is falling 4% per year and inflation is at 1%. Fiscal Policy recommendation: Monetary Policy recommendation: a. Scenario b: unemployment rate falls to 3%, real GDP is rising at 5% per year and inflation is at 8%. Fiscal Policy recommendation: Monetary Policy recommendation:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Fiscal and Monetary Policy scenarios. For
each scenario explain the standard Keynesian
recommendations for fiscal and monetary
policy. Mention both tools of fiscal policy and
all 4 instruments of monetary policy. Don't
just use the abbreviations - write out the
name of each tool at least once.
a. Scenario a: the unemployment rate rises to
12%, real GDP is falling 4% per year and
inflation is at 1%.
Fiscal Policy recommendation:
Monetary Policy recommendation:
a. Scenario b: unemployment rate falls to 3%,
real GDP is rising at 5% per year and inflation
is at 8%.
Fiscal Policy recommendation:
Monetary Policy recommendation:

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