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Consider the financial crisis 2007-2009 in USA. Assume that the crisis has been continuing for 10 years. We call this period as a long run
Consider the financial crisis 2007-2009 in USA. Assume that the crisis has been continuing for 10 years. We call this period as a long run period. To answer the following questions:
1.Assume that you are a policy maker in USA's government and central bank; how you can recover the crisis by changing macroeconomic variables?
2. During the crisis, How USA can recover its output gap if it faces an expansionary gap?
3. During the crisis, How USA can recover its output gap if it faces a contractionary gap?
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