Assume the economy in the United States has the following:

Unemployment is 7.2% and rising.

Inflation is at 1.1% and relatively stable at that level.

The GDP is at $20.6 trillion down from $22.4 trillion six months ago.

Assume that you are on the Council of Economic Advisors which is the group that advises the President on economic policy issues. It's your job to propose an Expansionary Fiscal Policy to help alleviate the problems in the economy. The NRU is 4% and the target inflation rate is 2.0%

1.Given the data above, what problem is the economy facing? Use the concepts of Supply and Demand in your explanation.