Question: Looking for any help on how to answer. An incomplete answer is also fine. The Congressional Budget Ofce projects a US federal budget decit of

Looking for any help on how to answer. An incomplete answer is also fine.

The Congressional Budget Ofce projects a US federal budget decit of $200bn a month in 2021. The Fed has said it will buy at least $80bn a month of US government bonds in 2021. Using an appropriate model from our course, describe the effects of this policy mix in the short run and long run (assume this policy mix is permanent). Include all relevant graphs, mathematics and words in your answer. Describe the effects on as many macroeconomic variables as possible

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