Suppose that the US economy is facing a recession.

1. Choose one policy solution (see below) to overcome a recession:

a) Classical approach of self-regulation

b) Keynesian demand side approach of fiscal policy

c) Keynesian demand side approach of monetary policy

d) Supply side approach of fiscal policy

2. Explain how you would implement the above chosen policy. Give specific policy tools of your chosen option.

3. Why did you choose this policy solution? Compare your chosen solution with the other policies. What is good about the policy you've chosen? What is bad about the policy you've chosen?

4. In terms of Price Level and Quantity, what outcomes will be the result of the policy you've chosen? Show the process of how the policy works.