Question: Given your knowledge of the AD/AS model, there is a trade-off between unemployment and inflation when expansionary AD measures are used to stimulate GDP growth.

Given your knowledge of the AD/AS model, there is a trade-off between unemployment and inflation when expansionary AD measures are used to stimulate GDP growth. Using the AD/AS model, illustrate and discuss how complementary AS measures can be used to contain any inflationary pressures stemming from the use of expansionary AD measures during a recession.

[Hint: Explain 5 (2 marks each) AD economic growth drivers and 5 (1 mark each) measures to contain inflation]

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