Objective: The purpose of this assignment is to (1) encourage you to see economics at the macro level, and (2) sharpen your analytical skills in applying economic theory to real-world events.

Task: The annual inflation, unemployment, and economic growth statistics for the country of Lalaland are given below.

Year

Inflation

Unemployment

Economic Growth

2016

3%

4.9%

3.2%

2017

6%

4.7%

3.5%

2018

9%

4.5%

3.9%

Regional averages for inflation, unemployment and growth are 4%, 3.5% and 3.4%

By using the Liquidity Preference Framework and the Aggregate Demand- Aggregate Supply analysis;

Suggest a monetary policy and/or a fiscal policy change for Lalaland.

governmet

Show the effects of your proposed change(s) on major macroeconomic variables.

Essentially, the purpose of the assignment is to figure out the problem (if any) with the economy given above data and suggest which monetary and/or fiscal policy to implement to address the underlying problem.