Question
Put yourself in the position of a policymaker and complete the following. What would you do in the following scenarios? Think of the idea of
Put yourself in the position of a policymaker and complete the following.
What would you do in the following scenarios? Think of the idea of stabilizing the economy | |
Answer either Expansionary policy, Contractionary policy, or do nothing and let the economy self-correct. |
1) AD-driven recession with highly flexible prices |
2) AS-driven recession with the loss of GDP as the main concern |
3) AS-driven recession with inflation as the main concern |
4) AD-driven recession with very sticky prices |
5) AD-driven EXPANSION with inflation and a too-fast increase in GDP as the concern. |
6) AS-driven EXPANSION. |
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