The year 2014 closed with the unemployment rate around 6 percent, real GDP growing at roughly 3

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The year 2014 closed with the unemployment rate around 6 percent, real GDP growing at roughly 3 percent, inflation just below 2 percent and apparently rising a bit, and the federal budget showing a deficit around 3 percent of GDP.

a. Give one or more arguments for engaging in expansionary monetary or fiscal policies under these circumstances.

b. Give one or more arguments for engaging in contractionary monetary or fiscal policies under these circumstances.

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Economics Principles and Policy

ISBN: 978-1305280595

13th edition

Authors: William Baumol, Alan Blinder

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Question Posted: Apr 16, 2018 03:52 AM

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The year 2014 closed with the unemployment rate around 6 percent, real GDP growing at roughly 3

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a Expansionary fiscal policy would reduce unemploym...View the full answer

Economics Principles and Policy

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