6 The inflation rate has fallen to 1 per cent a year but the unemployment rate is stubborn and has not fallen much. Real GDP is growing at more than 3 per cent a year. The stock market is at a record high. a Explain how the economy might have got into its current state. b Set out policies for the Bank of England and the government to pursue that will keep inflation low, lower unemployment and maintain a high real GDP growth rate. c Explain how and why your proposed policies will work.