l. Early in 1 976, real GNP was increasing at an annual rate of 5 percent. The annual rate of inflation was 6 percent. During the next 24 months both monetary and fiscal policy were highly expansionary.

(a) How did the 24-month macroacceleration affect the rate of inflation in 1 976, in 1 977, and in 1 978-1979? (Consult Appendix E if you wish.) Were the results surprising?

Explain. Why or why not?

(b) How did the 24-month macroacceleration affect the rate of unemployment and real GNP in 1976, in 1 977, and in 1 978-1979? Were these results surprising? Explain. Use actual data to answer both

(a) and

(b) .