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1.      Addressing inflation using Fiscal and Monetary Policy tools. Scenario - The US economy is currently...

1.      Addressing inflation using Fiscal and Monetary Policy tools.

Scenario - The US economy is currently experiencing high rates of inflation. You have Fiscal and Monetary policy tools available to address this problem:

Q1: To attack the problem of inflation you must select one Monetary Policy tool and one Fiscal Policy tool. Write down the name of your Fiscal Policy tool and your Monetary Policy tool.

Q2: Please explain why you selected the tools that you selected and why you did not select the other choices? Do this for both monetary and fiscal policy tools!

Q3. Thoroughly and completely explain how your solution (both the monetary and the fiscal policy tool) would work to solve the problem of inflation, and indicate the impact your solution would have on at least 5 key economic variables. Be specific.  

Please answer all question since all questions are connected to each other. Thanks :)

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Expert Solution

Rahul Sunny answered 2 years ago
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