Suppose that the Central Bank is known to use monetary policy to try to stabilize GDP. Suppose that anew employment report is released, which suggests that employment growth is lower than people thought it was going to be. what will happen to the price of government bonds? Explain. 14.8 A Recession Consider the following data: Suppose that 2015 was a totally normal year (almost identical to 2012, 2013 and 2014). This question asks you to think about what are the possible causes of recessions and how to use the data to determine what may have caused the 2016 recession. (a) Name two possible causes of recessions that don't seem to fit the data. For each of them, explain: i. Why, according to some model, it's possible for this to cause a recession. You can make the argument using equations, graphs or words, as long as you are precise. ii. What features of the data indicate that this is not what happened. (b) Name one possible cause of recessions that does fit the data. Explain: i. Why, according to some model, it's possible for this to cause a recession. You can make the argument using equations, graphs or words, as long as you are precise. ii. What features of the data indicate that this is what may be going on? Suppose that the Central Bank is known to use monetary policy to try to stabilize GDP. Suppose that anew employment report is released, which suggests that employment growth is lower than people thought it was going to be. what will happen to the price of government bonds? Explain. 14.8 A Recession Consider the following data: Suppose that 2015 was a totally normal year (almost identical to 2012, 2013 and 2014). This question asks you to think about what are the possible causes of recessions and how to use the data to determine what may have caused the 2016 recession. (a) Name two possible causes of recessions that don't seem to fit the data. For each of them, explain: i. Why, according to some model, it's possible for this to cause a recession. You can make the argument using equations, graphs or words, as long as you are precise. ii. What features of the data indicate that this is not what happened. (b) Name one possible cause of recessions that does fit the data. Explain: i. Why, according to some model, it's possible for this to cause a recession. You can make the argument using equations, graphs or words, as long as you are precise. ii. What features of the data indicate that this is what may be going on