In the aftermath of the 20072009 financial crises, the Fed became concerned about deflation. a. Use the

Question:

In the aftermath of the 2007–2009 financial crises, the Fed became concerned about deflation.
a. Use the IS–MP model including the Phillips curve to show how a decrease in aggregate expenditure could cause deflation.
b. What policies should the Fed pursue to attempt to prevent deflation? Use the IS-MP model including the Phillips curve in your answer.