9.02 FISCAL POLICY Economics For each scenario below, suggest a contractionary or expansionary fiscal policy with specific suggestions regarding congressional action. In a full paragraph, make sure you: e Identify what the economic situation is (recession or inflation?) e Explain what type of policy you would recommend (contractionary or expansionary?) e Suggest how Congress should go about enabling that type of fiscal policy (what types of laws should they pass?) Scenario 1 1. Unemployment is skyrocketing, and consumer confidence is low. Businesses are having to lay off workers and are decreasing investments. GDP has been down for two quarters in a row. Enter your answer to Question 1 here Scenario 2 2. The prices of goods are rising quickly, making money not worth as much as it was. It might get out of control soon. Even though there is almost full employment, people can't afford everyday items anymore. Enter your answer to Question 2 here