The economy is suffering from a situation economists have referred to as "stagflation." The GDP is showing a slower than normal rate of increase, an indication of a sluggish economy. Housing sales are low and unemployment is on the rise. To make matters worse, inflation is quite high.

1a. How would fiscal policy deal with this situation?

1b. How would monetary policy deal with this situation?

1c. Which policy is better suited to combat stagflation? Explain why.