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:
a. 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.
i. Think the options through and write down your choices.
b. Why did you select the tools that you selected and why did you not select the other choices?
i. Specifically, explain what is so good about the tool you selected and what is not so good about the tools you did not select? Do this for both the Monetary Policy tool and the Fiscal Policy tool.
c . Thoroughly and completely explain how your solution would work to solve the problem of inflation, and indicate the impact your solution would have on the key economic variables. Be specific.
i. Present this using the chain of events format with up or down arrowsto indicate the direction of impact on each variable.