Solved: Determine the monetary policy action and its consequences, Macroeconomics

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Determine the monetary policy action and its consequences

Question: What are the two policy options used to influence the economy?

In the current economy, we observe the following.

Inflation rate               9.20
Interest rate      10.60
Growth in Real GDP    -0.51
Unemployment Rate    6.80

a. Determine the monetary policy action and its consequences

b. Determine the fiscal policy actions and its consequences.

c. What are the possible negative side effects of your recommendations.

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Macroeconomics: Determine the monetary policy action and its consequences

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