Dilemma of Ms. Smart Ms. Smart looks out of her office window on the 38th floor of the Central Bank of Fairytale. She just finished flipping through the Fairytale's Economie Outlook report put together by the Policy Unit division of the Central Bank in the report consumer spending has decreased by 2% from the previous fiscal year, and the country's real GDP dwindled by 3% from the previous year. The GDP of Fairytale was 3.0 billion Fairytale Dollars (FS) and FS29 billion in 2017 and 2018 respectively. At the same time, the consumer price index increased from 111 in 2017 to 115 in 2018. Forecasts from the Statistics Fairytale show that the population will continue to grow at 23% for the next two decades. This creates both challenges and opportunities for Fairytale In 2001 huge deposits of gold was discovered in the southern part of the country. This discovery attracted investments and the cconomy grew rapidly between 2002 and 2014. During this period, the government invested heavily in research institutes, universities, and space programs. In 2015. gold mining firms started to declare losses. This was caused by the declining gold deposit, high costs of production, and many law suits won by environmentalist in the Southern part of Fairytale. The Chief Economist estimated that if all prices including nominal wages are fully flexible, real GDP of Fairytale in should be F$2.81 billion, everything else equal The Fairytale's report shows that interest rates have been decreasing and nearly zero. The interest rate for 2017 and 2018 were 4% and 2% respectively. However, demand for money has decreased drastically. An average household debt in Fairytale has increased by 20% in the last ten months. Major commercial banks have reduced lending facilities to both households and businesses Ms. Smart understands the economy of Fairytale very well. She belongs to the school of thought that believes in government intervention in an economy. She has a PhD in Economics from the National University of Fairytale, one of the best in the world. Mr. Free became the Prime Minister of Fairytale in 2019 and appointed Ms. Smart in January of 2020. His clection campaign was sponsored by the Fairytale Society of Business, an association of business owners in Fairytale. Mr. Free was a staunch critic of the previous government's policies centered on social housing, education, and narrowing income inequality. The previous government increased minimum wage from from FS9.5 in 2017 to FS11 in 2018. The Fairytale Society of Business was against the minimum wage and believed it should be closer to the average wage of FS9. During his campaigns, Mr. Free promised to reform the tax system, especially the corporate tax. Ms. Smart faces a huge task of providing coconomic policy advice to the Prime Minister. As she looked over her office window, her eyes struck a huge billboard advertisement for a major telecommunication firm. A sentence is inscribed on the board. She starred tensely at the board, the inscribed sentence reads- with people's ideas, you can move the world State and briefly discuss ANY four tools Ms. Smart can use to control money supply